Back in May, I wrote a piece about all the new changes coming to Bitcoin Cash (BCH) via a fork giving it the ability to offer better scalability & smart contract functionality like Ethereum. Well, the smart contract functionality dubbed Project “Wormhole” is finally seeing the light of day through a Mainnet launch.
A few weeks ago, Bitmain’s developers proposed a Smart contracts protocol upgrade for the Bitcoin Cash blockchain called Wormhole — it is no secret by now that Jihan Wu, CEO of the Chinese mining giant is a strong supporter of BCH. Basically, Wormhole is an offshoot of the existing Omni layer protocol. Let me try to decipher the technical jargon into easy to understand language for you. For my tech-savvy friends, a video of the lead developer of the project follows with subtitles in English detailing to intricacies of the project.
- This project is basically an attempt to implement the smart contract functionality on the BCH network without changing the consensus rules of the BCH network
- Wormhole utilizes the increased data carrier size & OP_RETURN (operation code) transactions — two functionalities that were added to the network in the recent hard fork with the sole purpose of giving BCH smart contract functionality in the future
- Omni Layer Protocol, an open-source software, which runs on top of the of the BCH network was utilized to perform these operations. This is the same protocol that is also used in the issuance & circulation of the stable coin Tether (USDT)
- Technical features were added via a hard fork to the Omni protocol to achieve the issuance of the native tokens of the new protocol called Wormhole Cash (WCH). You will need these tokens for your smart contracts or listing of your ICO via the BCH blockchain. WCH has been listed on the Coinex exchange.
- Fixed number of tokens (cap the amount to be created)
- Variable tokens or managed tokens (create, grant, revoke or increase/decrease tokens)
- Crowdsale or ICO (create & sell tokens for WHC)
And finally, to wrap it all up, Wormhole protocol basically gives the decentralized BCH blockchain network the capability to execute smart contracts just like Ethereum — providing high-speed, low commission, scalable solutions with perhaps the biggest advantage being of the two-layer security model. As per this model, the first layer offers security for the individual BCH transactions & then there is a secondary layer for the individual modes that won’t process any transactions unless the conditions are met for the Wormhole protocol requirements.
The project looks very good on paper & sounds promising as well. WHC transactions have been averaging over $1 million on the Coinex exchange ever since it got listed there but time will tell if Wormhole smart contracts will be able to challenge the functionality of the Ethereum based ERC 20 protocol in presenting an alternative for the creation & launch of ICOs.
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Originally published at www.datadriveninvestor.com on August 14, 2018.