2 years ago
Mercury Wallet, a Layer 2 scaling solution for Bitcoin, plans to integrate with the Lightning Network and unsighted its server.
Mercury Wallet, a Layer 2 exertion built for Bitcoin, is presently processing infrastructure to integrate with the Lightning Network.
Applications similar Mercury are a mode of scaling the usage of Bitcoin by temporarily performing transactions disconnected concatenation earlier returning to the main chain, making it easier and much cost-effective to marque payments to different users. But what is Mercury Wallet, however does it disagree from the Lightning Network and what could its integration yet execute for Bitcoin growth?
Statechains And Statecoins
In bid to recognize the Mercury Wallet, we indispensable archetypal recognize the exertion Mercury uses to physique its application: statechains.
A statechain works successful a precise akin mode to a blockchain oregon a sidechain. In short, a statechain provides cryptographic impervious of ownership for immoderate fixed statecoin. A statecoin tin beryllium thought of arsenic representing integer currency without really being the integer currency, which, successful this case, would beryllium bitcoin.
Similarly, the easiest examination to recognize a statecoin is to deliberation of it successful the mode that insubstantial wealth is tied to a golden standard. The insubstantial currency is not the existent gold, it conscionable represents immoderate of gold’s value. Similarly, a statecoin is not bitcoin, it is conscionable meant to correspond immoderate of bitcoin’s value. This allows users to transact the worth of bitcoin without interacting with the Bitcoin blockchain.
Now that we person a basal premise for statechains and statecoins, let’s instrumentality to Mercury.
What Is Mercury Wallet?
Mercury Wallet is itself an implementation of a statechain. The wallet is however unspent transaction outputs (UTXOs), oregon funds are organized into a statechain erstwhile they are deposited.
When a idiosyncratic opts successful to usage Mercury Wallet, they deposit UTXOs into the wallet done the graphical idiosyncratic interface (GUI) successful a reasonably straightforward process. Depositing UTXOs into Mercury Wallet is benignant of similar playing a crippled of poker with your friends. Each idiosyncratic brings a fixed magnitude of currency denominated successful chips. The chips cannot beryllium divided into smaller denominations of currency and person a fixed value.
Likewise, UTXOs deposited into Mercury Wallet cannot beryllium divided into smaller denominations. Therefore, if the fixed UTXO represents 1 BTC, it indispensable beryllium spent successful afloat and cannot beryllium divided into smaller payments. This is 1 of the downsides to Mercury Wallet.
Accordingly, erstwhile funds are deposited, a concatenation of transactions secured by cryptography signifying ownership begins. If a idiosyncratic would take to walk their UTXOs, it would make a way of ownership starring from the spender to the receiver each clip a transaction was made. However, successful bid to transact with Mercury Wallet a idiosyncratic indispensable beryllium transacting with different Mercury Wallet.
Moreover, each deposited UTXO successful essence creates its ain statechain that traces the transference of ownership with each transaction connected the Mercury Wallet platform. This is wherefore Mercury Wallet users indispensable interact with 1 another, to proceed the concatenation of custody.
In addition, should users privation the way of ownership for their deposits broadcasted to the Bitcoin blockchain to really transportation the funds, Mercury’s interface is connected to a Bitcoin node making the process speedy and easy.
So, what does Lightning connection Mercury Wallet that it does not already have?
Privacy, Security And Optionality
If the Lightning Network is simply a Layer 2 scaling solution, and Mercury Wallet is simply a Layer 2 scaling solution, doesn’t that marque them competitors? This is an incorrect lens done which to presumption the 2 projects. In fact, it would beryllium much close to presumption them arsenic adjacent, alternatively than successful absorption to 1 another.
Accordingly, the Lightning Network is an implementation of a connection protocol done the usage of channels, and Mercury Wallet is an implementation of statechains that leverage a merchandise with a institution down it.
However, Mercury integrating its merchandise to the Lightning Network allows Mercury users to entree its connection protocol. This integration enables Lightning-to-Mercury transfers oregon vice versa, which strengthens Mercury’s usage cases.
For instance, currently, the concern exemplary of Mercury is to cod a interest for facilitating Layer 2 transactions by charging an code erstwhile funds are broadcasted backmost to the Bitcoin blockchain, which users are required to supply erstwhile they initially deposit funds. This is simply a privateness concern, since the code has to beryllium collected upfront and stored, adjacent though it does not person to beryllium the aforesaid code the deposited UTXOs are coming from.
Nevertheless, with a Lightning integration, Mercury could complaint the interest upfront and lone request to cod a Lightning invoice, storing nary of the idiosyncratic data. This would not lone beryllium a boon for privacy, but besides security.
In its existent state, Mercury Wallet is taxable to denial-of-service (DoS) attacks, which is wherever a malicious idiosyncratic spams fake transactions to flood the network, thereby making it hard oregon intolerable to usage the platform. Being capable to complaint Lightning invoices up beforehand would drastically trim the likelihood of this onslaught vector by placing a terms connected spam and allowing much optionality.
Thus, Lightning invoicing would besides let Mercury to alteration its pricing exemplary entirely. Similar to however Opendime allows users to transact with UTXOs placed onto a flashdrive-like instrumentality for easiness of use; Mercury users would beryllium capable to acquisition a virtual signifier of Opendime-like existent property en masse, which would let bulk discounts for aggregate deposits.
Still, Mercury has 1 different upgrade connected the horizon.
A Blind Server
Currently, Mercury has plans to unsighted its server during the 4th fourth of this year, according to CEO Nicholas Gregory, per an email correspondence Bitcoin Magazine had with the Mercury team. What does this mean?
“The blinded mentation of Mercury Wallet volition use cryptography successful an attack that makes it intolerable to place coins that person been transferred oregon swapped,” explained Tom Trevethan, CTO of Mercury Wallet.
The institution announced its plans to spell unsighted successful June with an mentation of what it means to beryllium blinded successful the satellite of cryptography here. In short, the enactment of blinding Mercury’s server guarantees that it cannot cognize immoderate identifiable accusation astir a coin which prevents censorship of coins.
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