The Rai Network
- The Rai Network
- a 2nd Layer Network on Bitcoin
- I propose a 2nd layer on top of the Bitcoin network that can exist only because of the shortcomings of the inevitable characteristics that Bitcoin has. The main chain security is given by the mining process that is paid in fees by the users that transact on chain. As more and more users would use the network the fees would start to go up which means the security goes up, and this is a good thing. The shortcoming of the high fees is that the low value utxos that were not consolidated could become dust. "Dust" is the utxo that in order to be spent would require a fee that is higher than the value of the utxo. We assume that a rational user would not spend dust utxo.
- This assumption gives a degree of certainty that the Dust utxo will not move on-chain. A good comparison would be the Rai Stones that ancient cultures used as money. These stones were big and heavy and could not be moved, but people would just keep a record of who owned it last.
- The 2nd layer proposal would be a proof of ownership ledger, where the new tokens would be created only by users that own dust utxo and that would sign a message that proves the ownership of the on-chain dust utxo. The transactions on this 2nd layer could be on a mimble-wimble system that would keep track of the last owner and always have a peg to the on-chain dust. If the dust on-chain would ever be spent, the coins on the 2nd layer would be destroyed (last users or socialized). Yes there could be destruction of coins but the assumption is users are rational and the chance of destruction is very low. Taking this into consideration the value of the utxo on the 2nd layer would be lower than the face-value to account for the risk of destruction. We could envision a future where assurance companies would insure the "rai satoshis" and still have a profitable business.
- All users in this network would have to keep consensus by verifying the cryptographic ownership of the last user and the existance of the dust on-chain as a peg for the rai sats. If this consensus is reached there could never exist more rai sats than the ones that entered the Rai network, so this network is inflation resistant. This network never settles on-chain. The security is given by the low probability of a user to ever spend the Dust on-chain as it would cost more in fees than the dust itself.
- The irony characteristic of this network is that the security increases with the increase of the on-chain fees. The second irony is that fewer satoshis one utxo would contain, more secure that utxo would be (because it would be more costly to spend), hence a closer valuation to face-value. 1 sat is the biggest Rai Stone.
- Such a network would maybe have a place in a world where fees are from $100 and up because that's when's more likely for utxos to become dust. So it would happen far into the future. A shortcoming of this network would be the increase of the UTXO set.
- The information given here is just the concept. No specifications are provided so the network may not even be technically feasable.
- Twitter handle: @zndtoshi