Blockstream, a for profit company that hires numerous bitcoin developers who tend to be the most vocal against a blocksize increase, has revealed in broad sways its business plan through a statement by Adam Back, its CEO.
“Blockstream plans to sell side chains to enterprises, charging a fixed monthly fee, taking transaction fees and even selling hardware,” Laura Shin of Forbes reports.
Adam Back confirmed he is the source, stating “that’s correct, and an accurate quote.”
The company plans to provide enterprises, and whoever is willing to pay for it, with customized chains that are somehow pegged to bitcoin’s blockchain. For the service, they will have to pay a fixed monthly fee.
It’s unclear in what context Shin is quoting Back as stating “taking transaction fees.” Arguably there could be a hybrid business model, where they pay a monthly fee on top of transaction fees, or perhaps they can choose either or.
However, it could also be referring to potential alternative ways for bitcoiners themselves to transact. There were some suggestions early on, for example, that one way to scale might be by providing a bigger blocksize side-chain, then users choose whether to move to it or stay.
They could also provide less secure, perhaps even centralized, side-chains, where users can transact with fees paid to Blockstream Corp.
Or he could be referring to the Lightning Network, which has a Blockstream developer working on it. As a for profit company, presumably they are expending their resources on LN with some profit motivated end.
What that would be exactly is unclear beyond transaction fees, but on side-chains Blockstream has a patent.
They already have one sidechain of sorts, Liquid, which is used by some bitcoin businesses, such as Bitfinex, for a monthly fee.
Liquid promises instant transactions, something bitcoin used to promise but does no longer because the lack of capacity increase has made confirmation times unpredictable.
It used to be the case that you could send a bitcoin transaction and within seconds you’d be fairly confident the payment has been made.
These zero confirmed transactions are, or rather were, less secure in absolute terms, but they were pretty secure, to the point BitPay and Coinbase used them for years with no problem.
They can no longer do so, unless of course they pay a fixed monthly fee to Blockstream for Liquid. Something which might indicate what may happen with on-chain transactions too.
That’s if Samson Mow, Blockstream’s CSO, gets his way. Apparently he is on a world tour, visiting the offices of Bitstamp in Ljubljana.
Bitstamp has a big decision to make regarding the upcoming segwit2x fork. If they follow Gemini and Coinbase on the longest chain, then there will probably be consensus on the labeling matter.
If they don’t, then what was said at that meeting may become relevant. Just as it is quite relevant what was said in the meeting between Adam Back and Slush Pool in or around 2015-16.
Slush’s CEO used to be a vocal supporter of big blocks, with his pool the only one to offer miners choice, but following a meeting with Adam Back, Slush shortly thereafter made a complete uturn and is now a vocal supporter of keeping bitcoin congested.
Bitstamp has so far generally been neutral. They are a regulated exchange, so will need some objective way to decide labeling. The only objective method known is the longest chain. Small blockers have not been able to come up with an objective alternative to it.
So we’ll see what Bitstamp announces, just as we’ll see whether miners will keep their overwhelming majority to the point of near consensus as the countdown, to an historic day for bitcoin, continues.