Bitcoin's Sidechains May Soon Support Smart Contracts and Allow Firms to Launch ICOs

  • Blockchain startup Temco will reporteldy launch its ICO via a sidechain on the Bitcoin network.
  • Smart contract functionality via sidechains supporting the Bitcoin blockchain may be possible after RSK Labs completes its beta testing.

RSK, an open-source smart contract platform, is reportedly developing a sidechain that will allow the Bitcoin (BTC) blockchain to be used for launching initial coin offerings (ICOs). The concept of using a cryptocurrency network to help raise funds was actually first initiated on the Bitcoin platform in 2013.

At that time, the blockchain infrastructure to support crowdfunding on the Bitcoin network was quite limited - compared to what Ethereum currently provides. J.R. Willett, a computer science graduate from Seattle Pacific University, raised approximately $500,000 in BTC when he extended the Bitcoin protocol (in 2013) by adding a new protocol layer called “Mastercoin”.

Temco, a South Korean firm focusing on developing blockchain-based supply chain management systems, will reportedly launch an ICO by using RSK’s technology in late November. The company aims to raise $19 million through its public token sale.

Smart Contracts On The Bitcoin Network

Notably, this is not a recent development as RSK’s developers have been working on creating a Turing-Complete sidechain to support smart contract development since March of 2016. At the time, Bitmain Technologies led RSK Labs’ $1 million seed funding round.

Although RSK aims to introduce smart contracts to the Bitcoin blockchain, they are still programmed using Solidity - which is the primary programming language used by the Ethereum platform.

RSK’s sidechain project also uses a bitcoin-pegged digital currency called “smart bitcoin” (SBTC). At present, there are very few cryptocurrency platforms that are actually using RSK’s sidechain to develop smart contracts as it’s still in its experimental phase.

Scott Yoon, a former equity manager and current CEO of Temco, told Coindesk that he thinks more crypto projects will start using the Bitcoin platform to launch their smart contract applications. Yoon also believes that they will effectively perform “the same function as Ethereum” in the future.

Not "Just A Payment Cryptocurrency"

Yoon and Joey Cho, the business development head at Temco, said that the Bitcoin network will have more use cases - other than being “just a payment cryptocurrency.” Yoon added that RSK will likely be the leading smart contract solutions provider and this will “open another era of Bitcoin, like Ethereum.”

According to Temco’s developers, they have introduced their own crypto token in order to help small and medium sized businesses (SMEs) track their products on the supply chain. As CryptoGlobe reported, giant retail corporation Walmart is also planning to use IBM’s proprietary blockchain technology to ensure food safety by tracking food items on its supply chain.

Temco aims to allow merchants and consumers on its network to use its digital token to pay for data storage and subscription fees for its business intelligence products.