Everyone's Thinking About Second Layers Is Backwards

I person written rather a spot astir my concerns regarding drivechains and miner incentives implicit the years, due to the fact that I deliberation it is simply a precise important acceptable of risks to beryllium alert of. Bitcoin is astir 15 years aged arsenic a unrecorded web astatine this point, and it has stood up to a bully spot of unit and outright malicious griefing and attacks implicit those 15 years. Bitcoin has withstood interior attacks from developers trying to radically change the system, it has withstood the aforesaid onslaught from astir of the large businesses successful the space, it has survived what could person been fatal and catastrophic bugs, ace powers banning it, chaotic terms volatility, etc. It has stood up to everything to day that has been thrown astatine it. Why?

Because of the resilience of its inducement structure.

Developer coups failed due to the fact that of invested users incentivized to fig retired the rational agelong word absorption to go. Business coups failed due to the fact that those aforesaid users and their customers to those businesses is what made them money. Nation states coming down and banning Bitcoin had nary effect, due to the fact that invested capable users had each crushed successful the satellite to permission and fly to friendlier jurisdictions. If it weren't for the incentives of idiosyncratic users, and however their idiosyncratic incentives interacted with each different arsenic a analyzable system, Bitcoin would not person survived immoderate of those issues.

Anything that presents a superior anticipation of severely altering the equilibrium of those incentives is thing that should beryllium approached with utmost caution and skepticism. In my opinion, destabilizing the inducement equilibrium that makes Bitcoin enactment is fundamentally the lone mode to truly origin a strategy failure. Anything other that tin beryllium thrown astatine Bitcoin is thing that should beryllium robustly adapted to, adjacent if it does origin you upset due to the fact that the fiat terms is affected negatively.

Closed Versus Open Layers

When it comes to mining incentives and however they are affected by secondary layers connected apical of Bitcoin, determination is 1 important adaptable oregon diagnostic to consider: Is the furniture unfastened oregon closed. What I mean by that, is however does the information successful that furniture work? Does it really necessitate progressive collaboration and practice betwixt participants connected the 2nd furniture to function, oregon tin it enactment asynchronously similar Bitcoin's basal furniture wherever participants bash not request to synchronously cooperate for it to work?

This azygous item has monolithic implications for the effect immoderate caller Bitcoin layers tin person connected the basal furniture mining incentives. And, astatine slightest from my constituent of view, radical successful this abstraction dangerously miscalculate which 1 has affirmative consequences. A precise wide held content is that layers which necessitate synchronous practice are inherently flawed, and that spot is simply a monolithic shortcoming, portion simultaneously believing that asynchronous non-cooperative layers are the beatified grail of scaling.

I would contend the nonstop other is true. That request to synchronously cooperate that galore radical look astatine arsenic a friction for users, engineering constraints that are crippling, oregon an insurmountable hurdle, tin besides beryllium looked astatine arsenic a signifier of antiaircraft architecture.

While requiring enactment betwixt participants successful a furniture to update the authorities of that layer, nary 1 extracurricular of the acceptable of participants tin effort to crippled that layer. Think astir a Lightning channel: Who tin update the authorities of that Lightning channel? Only the participants. Who tin straight summation from malicious actions on-chain to adjacent oregon modify a transmission on-chain? The participants. Miners tin payment indirectly from fees paid for malicious closures, but they person nary nonstop power implicit that. They tin lone look astatine what each subordinate is consenting to wage successful fees, and prime the highest payer. That is successful nary mode antithetic than immoderate different lawsuit of conflicting on-chain transactions competing to beryllium confirmed first. Miners won't adjacent find themselves successful that concern either, unless a transmission subordinate chooses to taxable a malicious close — which they person nary power over.

So what does this bash to change oregon alteration the dynamic of miner incentives? Nothing. It is yet nary antithetic than Bitcoin incentives are without Lightning. Miners person to take betwixt a acceptable of transactions, with nary power whatsoever implicit what those transactions are, and prime the ones that marque them the astir money. Contrast that with drivechains.

The contents of a drivechain artifact tin beryllium thought of arsenic a "transaction" for the intent of reasoning astir this here, with the 1 objection that the azygous "transaction" contains a multitude of interior transactions whose bid each person superior consequences for the worth of the "transaction." Who tin modify oregon update the contents of this "transaction?" Literally anyone. Now to beryllium clear, this is simply a weird conceptual happening trying to representation the method world to this analogy, but it's indispensable I deliberation to marque the constituent I americium trying to make. The drivechain block, oregon the information that anyone tin modify oregon update and see successful a transaction, isn't truthful overmuch the transaction itself arsenic it is information anyone tin see successful their ain transaction. But the constituent is anyone tin see their ain mentation successful a transaction, and lone 1 of them tin confirm.

That instantly gives miners an asymmetric vantage successful interacting with that furniture implicit immoderate different subordinate who is not a miner. When it comes to a Lightning channel, miners can't conscionable update oregon alteration the existent authorities of the transmission betwixt you and idiosyncratic else. That idiosyncratic other has to beryllium the miner themselves, oregon they person zero power implicit that. When you and idiosyncratic other person a channel, and your counterparty tries to corroborate an aged state, the miner gains thing from that but mining fees, conscionable similar immoderate different transaction. They person nary peculiar inducement to corroborate an aged authorities implicit the existent 1 but the feerates betwixt each other, conscionable similar each different transaction they consider. They person nary peculiar payment from 1 oregon the other.

Contrast that with a drivechain. Let's disregard the contented of miners stealing coins successful a mode that validates sidechain rules, and unreal that is not an contented and volition ne'er happen. Drivechains inactive adhd a wholly antithetic dynamic and inducement for miners: Their quality to preferentially payment from circumstantial transactions occurring, not occurring, oregon the bid they hap in. A miner can't conscionable leap into a Lightning transmission they are not a subordinate of, and alteration however it updates off-chain. They can't halt you from making that off-chain outgo conscionable due to the fact that it would payment them to person it not occur. That's conscionable fundamentally not however Lightning works. That is precisely however drivechains enactment though. Anyone tin marque a transaction crafting a caller drivechain block, but that artifact volition ne'er beryllium confirmed without miners approval. Combine that world with the information that anyone tin marque 1 of those transactions, including miners themselves, and they person a monolithic asymmetric powerfulness nary different participants do. They person full power implicit what the contents of sidechain blocks each clip they excavation a mainchain block. So dissimilar Lightning, successful the discourse of drivechains, if a miner tin payment from your transaction not occurring, they tin forestall it occuring truthful agelong arsenic they excavation the adjacent block, and they tin regenerate it with immoderate they want.

That is simply a very, precise large quality successful presumption of however these 2 types of 2nd layers power wide web incentives, and it doesn't conscionable use to drivechains. It applies to immoderate benignant of 2nd furniture strategy that is "open" successful the consciousness that anyone tin interact with it successful a mode to alteration oregon update its state. The aforesaid contented exists for non-federated rollup variants called validiums. Any benignant of rollup similar system, specified arsenic a validium, that doesn't store the accusation users necessitate to retreat their wealth connected the mainchain, but allows anyone who tin supply a Zero Knowledge Proof oregon different signifier of impervious that each the equilibrium updates are valid to execute a authorities update, is the aforesaid benignant of dynamic, adjacent worse arguably. Any miner astatine immoderate clip could update that system's authorities with perfectly valid transactions, and conscionable clasp the information users request to exit the strategy hostage. At immoderate time. Even if they are conscionable 1% of the mining hashrate. Miners tin bash thing of the benignant with "closed" systems similar Lightning.

Wrapping It Up

Imagine each the types of systems radical privation to physique connected Bitcoin; decentralized exchanges, arbitrary astute contracts, programmatic unchangeable worth systems, etc. Applications built connected apical of Lightning inherently heavy restrict who tin manipulate oregon effort to crippled those applications; i.e. lone the radical really progressive successful the Lightning channels hosting these applications tin bash so. Those types of applications constructed connected thing similar a drivechain, oregon a rollup, are unfastened for perfectly anyone to effort to manipulate oregon game. Any benignant of exertion oregon strategy built connected apical of Bitcoin that has unfastened entree is gameable by anyone. And successful an unfastened entree paradigm successful Bitcoin, the miners ever person the archetypal spot successful enactment to crippled those applications. No substance what the exertion is, oregon however hard it is to crippled it, oregon however overmuch you tin nett by gaming it, the miners ever person the quality to crippled it archetypal without letting anyone other marque that attempt.

This is simply a precise monolithic deviation from the existent dynamic, oregon the aboriginal dynamic of closed systems, wherein miners simply prime from a acceptable of transactions presented by different radical with nary quality oregon power implicit what those transactions are. It's a wholly antithetic universe. Closed systems wholly partition disconnected the quality to extract worth by gaming the strategy from miners, absent progressive collaboration with a bulk of miners by a subordinate successful that system. Open systems tin beryllium gamed asymmetrically by miners without adjacent requiring a majority.

That is simply a implicit paradigm shift, and a perchance unsafe one. The communal statement wherefore this isn't a interest is that it is already made imaginable with systems similar Stacks, oregon tokens connected Ordinals. These systems, adjacent though they are unfastened systems, are not a due portion of the Bitcoin market. Stacks oregon an Ordinal token aren't conscionable inherently going to summation successful worth due to the fact that Bitcoin does: They are freely floating tokens valued independently of bitcoin. If the worth of those systems does not turn successful lockstep with the worth of bitcoin itself, past the grade to which they distort oregon change incentives shrinks accordingly to the spread successful maturation betwixt those systems and Bitcoin itself. They bash not person the aforesaid grade of power astatine each connected incentives that a akin unfastened strategy pegged straight to the worth of Bitcoin itself does.

Arguing we should proceed gathering much unfastened systems connected Bitcoin due to the fact that immoderate are imaginable present is akin to arguing that you person a precocious but not rather fatal dose of poison successful your body, truthful you mightiness arsenic good support ingesting much of that poison. It is simply a wholly irrational and self-harming cognition and mode of thinking.

From wherever I stand, the azygous astir important origin to see erstwhile processing and extending the functionality of Bitcoin going guardant is to get the functionality we privation oregon request portion actively avoiding the enabling of immoderate much "open systems" arsenic I person defined them above. If distorting incentives is the lone mode for Bitcoin to fail, these types of systems are the poison pill with a lethal dosage within. We should debar them similar the plague. 

*NOTE* Article was updated soon aft work to close terminology errors related to rollups and rollup-like systems.