A new blockchain project called VeriBlock is generating as much as 20% of daily Bitcoin transaction volume. And that is when this project is still in the testnet.
The developers of Bitcoin core team have been observing a strange activity over the network since last few days. There has been a steep rise in the number of OP_RETURN transactions, the kind of rise which has not been seen ever. These transactions are used to embed certain data into the Bitcoin blockchain, and a rise in these transactions means that more data is being written to Bitcoin’s blockchain in the recent days. When all these transactions were examined closely, it turned out that they’re originating from one particular blockchain project. And the most interesting part is that this project is a new one rather than being an established old project.
That’s right. A project called VeriBlock is behind all these OP_RETURN transactions being observed on Bitcoin blockchain, which now account for as much as 20% of Bitcoin’s daily transaction volume. And that is when VeriBlock project is still in the testnet. Imagine what can happen once this project enters mainnet!
Now, you must be wondering what does this project do? Well, it’s a proof-of-proof chain project. What is this proof-of-proof? It’s a supplemental consensus mechanism that can be used by the blockchains of alternative coins to increase the security of their primary consensus mechanism. The problem with majority of altcoins is that low rewards for mining these coins leads to disinterest among miners, and thus a lower hashrate. Now this lowered hashrate makes these chains an attractive target for cybercriminals. A recent example is the 51% attack on Ethereum Classic. If an attacker can control more than half of network’s hashrate, he can easily create new coins out of thin air by double-spending the coins and rewriting the history of blockchain.
VeriBlock wants to solve this particular problem by using the sheer power of Bitcoin network. As everyone knows, there’s no dearth of computing power in Bitcoin blockchain even after the recent fall in its prices. Therefore, what VeriBlock does is putting the current state of any particular altcoin’s ledger over Bitcoin blockchain so it can’t be altered. Now, even if the main chain of altcoin is hacked and rewritten, a version of the original chain remains stored securely over Bitcoin network. That version may be retrieved anytime to quickly figure out if someone is trying to take over the network.
Interestingly, former Bitcoin Core contributor Jeff Garzik is a part of the VeriBlock team. Garzik had led the development of abandoned SegWit2x hard fork in 2017.
Now, while there’s some debate on whether these transactions should be considered anything more than spam, the fact is that decentralized nature of Bitcoin allows anyone to use it for any purpose as long as they’re paying the fee. So at present there’s no way to stop VeriBlock, no matter whether someone likes it or not. It will be interesting to see how the scope and debate regarding this project expands in 2019.