Antonopoulos Talks Ripple And Blockstream’s Liquid Sidechain, Says XRP Supporters Are “Not Interested In BTC”
Andreas Antonopoulos Discusses Ripple And Blockstream’s Liquid Sidechain, Saying That XRP Supporters Are “Not Interested In Bitcoin”
Andreas Antonopoulos is a well-known proponent of Bitcoin and has even published “Mastering Bitcoin” for consumers that want to know as much as possible about the industry. Recently, during a YouTube-based Q&A session, Antonopoulos discussed the Liquid sidechain from Blockstream. He also answered questions about potential competition between XRP/Ripple and the Bitcoin Liquid sidechain, based on their use cases.
The discussion started with information about the Liquid sidechain, saying that the product was made by Blockstream. As many people know, Blockstream has been frequently tied in with Bitcoin-related projects. A sidechain is basically a separate blockchain that still connected to the main chain through a mechanism called a two-way peg. This peg makes it possible to make assets mutually interchangeable at a rate that has already been set.
More clearly, Antonopoulos said that, with a side chain, “you can move value from Bitcoin’s chain… to this other blockchain, use it there for some purpose, and then move it back.”
With Liquid sidechain, the users can use Liquid BTC, which is considered a “one-to-one equivalent of Bitcoin” that secures 1 BTC on the Bitcoin blockchain. Equivalently, it counts as 1 Liquid BTC on the side chain for faster and cheaper transactions. Furthermore, it does not clog up the Bitcoin blockchain.
Liquid has remained in the beta stage for over a year, even though it is meant to be a “backend exchange-to-exchange pipeline” for Bitcoin transactions, according to Antonopoulos. He commented,
“The idea being, you have exchanges around the world who must withdraw and deposit… Bitcoin to addresses that belong to other exchanges. Every time they do a withdrawal or deposit, they are not only using up space on the Bitcoin blockchain, but they also need to pay fees.”
Switching the attention to Liquid’s use case, Antonopoulos added,
“Liquid is essentially payment channels with exchanges that allow them to move money… between themselves directly, like a SWIFT network. Liquid uses a federated signing model. It is not a mined chain, but a signed chain. It uses a proof-of-authority consensus algorithm.”
Antonopoulos added that end users and consumers are not the target audience of this sidechain solution. Instead, it is meant for exchanges that have many large Bitcoin transactions. When discussing if there is potential for competition between Liquid sidechain and XRP, Antonopoulos said, I don’t think so.
“Ripple [XRP] has a different model in its consensus layer, as well as… how the currency is used within the network. I think the people who are interested in XRP are not interested in Bitcoin, even though a sidechain.”
To elaborate on that note beyond just the comparison of the two sides, Antonopoulos added,
“There is a spectrum of applications here, from payment channels and atomic swaps with… [decentralized] Lightning Network to a [distributed proof-of-authority] sidechain like Liquid, to XRP/Ripple. There is some overlap in those applications, but I don’t think the overlap is enough and… I think they differentiate enough that they don’t directly compete.”