Smart contracts have been a revolutionary development in the blockchain industry, allowing for secure and automated execution of agreements. While the industry standard has been to host and execute smart contracts on the blockchain itself, the Peercoin Foundation has been experimenting with a new approach. By moving the execution of smart contracts off-chain, Peercoin aims to provide increased privacy, lower fees, and improved scalability.
One of the key advantages of moving smart contract execution off-chain is increased privacy. To external observers, the contract appears as a regular transaction with no identifiable information. Additionally, lower fees are achieved due to the reduced size of off-chain transactions and cheaper signature validation. This approach also leads to improved scalability as the most computationally intensive work is done off the chain, with final balances settled on the main chain.
The Peercoin Foundation’s approach to off-chain execution involves a combination of technologies. Threshold signatures allow for consensus within large groups off-chain, ensuring privacy and scalability. Discreet Log Contracts (DLCs) provide a way to execute contracts without relying on scripting or virtual machines, keeping contract details confidential. Oracles process real-world events and deliver information to contracts, ensuring data accuracy.
One challenge with DLCs has been reliance on centralized oracles, which can undermine trust in the system. The Peercoin Foundation addresses this issue by introducing distributed oracles, also known as oracle swarms. By leveraging a network of participants with internal consensus and governance, distributed oracles enhance trust and reliability in contract execution.
While these advanced technologies hold great potential, they must be easy for users to adopt and integrate into their daily lives. The Peercoin Foundation plans to incorporate threshold signatures, distributed oracles, and off-chain contracts into the Peercoin Flutter Mobile Wallet. This integration will enable users to create and interact with DLCs and form oracle swarms with ease, making blockchain technology accessible to a broader audience.
Established in 2018, the Peercoin Foundation is a nonprofit organization dedicated to promoting and supporting the Peercoin project. The Foundation empowers the Peercoin community by providing tools for education, development, and progression of the project. As an open-source decentralized ledger, Peercoin has no governing body, and the Foundation operates solely on community donations.
The Peercoin Foundation’s exploration of off-chain execution for smart contracts represents a significant step towards a more efficient and accessible blockchain ecosystem. By leveraging innovative technologies like threshold signatures, DLCs, and distributed oracles, Peercoin is paving the way for enhanced privacy, lower fees, and scalable smart contract execution. Through mobile integration and community support, Peercoin is contributing to the evolution of blockchain technology for the benefit of all stakeholders.