What is Drivechain? Will It Make Altcoins Obsolete?

Bitcoin (BTC), the original cryptocurrency, has often faced criticism for its scalability and the political change process. Drivechain presents a new vision for Bitcoin where various problems are solved as specified in BIP300 and BIP301.

Drivechain is a project that aims to improve Bitcoin’s functionality by using sidechain technology. By leveraging connected sidechains, Drivechain will enable any person to transfer their BTC to a number of connected blockchains. As a result, it will be possible to transfer bitcoins to a fixed sidechain that supports smart contract technology or one that uses privacy technology such as ring signatures.

The transferability of BTC will be bi-directional due to the link between the main chain (BTC blockchain) and the attached side chains. Therefore, it would be possible to move BTC back and forth from the main chain to a pinned side chain.

Also, Drivechain provides an alternative to the divisive and political processes now in place to change Bitcoin. The addition of opt-in sidechains makes it possible to introduce new functionality instead of the need to change “Layer 1” regulations.

By copying whatever useful properties Bitcoin’s rivals may have, it eliminates any justification for using them. This will make Bitcoin the exclusive cryptocurrency, which is incredibly beneficial for an asset that wants to be real “money”.

Additionally, it offers to make enough transaction fees to cover the cost of BTC’s security budget. This is crucial because the block grant will decrease as it decreases over time. Moreover, the security budget’s current options are extremely difficult to implement.

Will Bitcoin’s Drivechain Make Other Altcoins Obsolete?

The Drivechain features can be achieved with a soft fork. And it will come with a number of benefits for BTC fans and investors.

First, without ever changing the main chain, it would increase Bitcoin’s functionality through opt-in sidechains. Second, any viable rival altcoin can be converted into a sidechain strictly superior to the original altcoin. This will eventually cause Bitcoin to eat into that altcoin’s market share. And third, it will support Bitcoin’s security budget as block support declines over time.

The relevant sidechains will be part of Bitcoin’s portfolio. The potential for a sidechain to generate transaction fees will determine whether or not it is included in this portfolio. The reason for this is that miners will only mine on sidechains that increase their profitability. Therefore, the preferences of Bitcoin users will determine the development. This economic decision-making process could replace the Community’s current political decision-making procedure.