Who do you trust more: Statechains (Mercury) or Sidechains (Liquid)? \ stacker news ~bitcoin

Who do you trust more: Statechains (Mercury) or Sidechains (Liquid)?

3041 sats \ 18 comments \ @joda 6 Feb bitcoin

zaps forwarded to @OpenSats (100%)

Statechains like Mercury:

Swapping in your private key rather than creating an on-chain transaction.
Centralized (one company, Commerceblock) runs the server (single point of failure), but it doesn’t “know” anything (blind signatures).
Unilateral exit to base chain with timelock (you can get your Bitcoin back even if the server goes away).

Sidechain like Liquid

On-chain transaction sends BTC to multisig wallet. Token (L-BTC) created backed 1-to-1 with bitcoins.
11-of-15 multisig of federation required to peg-out (get your BTC back).
If something goes wrong with the federation for 7 days, Blockstream has an overriding key to retrieve the BTC.

Statechain (Mercury)54.2%

Sidechain (Liquid)45.8%

24 votes \ poll ended

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215 sats \ 3 replies \ @OriginalSize 6 Feb

First I heard of Mercury.

Liquid's been in operation for years without any hiccups that I can recall. WBD with Anita Posch just clued me in that there are options to swap into lightning using it. Add that it seems promising for asset issuance and I think the choice is clear between these two.

0 sats \ 2 replies \ @joda OP 6 Feb

Mercury has been in development for several years. There were articles and videos about "statechains" four years ago, which is what turned into "Mercury".

I wouldn't expect Liquid to have any major "hiccups" just yet. FTX, GOX operated for years "without issue"...

0 sats \ 1 reply \ @OriginalSize 6 Feb

Development != use.

Still have reservations about sidechain integrity but with time and knowledge Liquid seems to be getting there.

I didn't consider that Liquid might rug everyone and lead to a decade of litigation. Is Mercury immune to that?

0 sats \ 0 replies \ @joda OP 6 Feb

not as far as I know. They are very "centralized" but talk about a federated option. They also say that because of a special chip they use, private keys are not seen and are securely destroyed. While that's probably true, I don't see how it can ever be very distributed beyond an authorized federation, which is no better than Liquid from a centralization standpoint (though you still have the emergency unilateral recovery of funds with Mercury that you don't have with Liquid).

Liquid seems fine as a "service" but I don't consider it a scaling solution for Bitcoin that lives up to the values of Bitcoin.

26 sats \ 2 replies \ @nicosey 6 Feb

Solving very different problems and operate differently.

Mercury V lightning network

Liquid V Fedi

Those would be more thought processes

0 sats \ 1 reply \ @joda OP 6 Feb

sorry, what does "V" mean?

10 sats \ 0 replies \ @OceanSlim 7 Feb freebie

Versus. He means vs. eg. Comparing Liquid to Fedi and Mercury to Lightning are more accurate comparisons.

4 sats \ 3 replies \ @delta1 6 Feb

some notes:

mercury: you are trusting the coordinating server to delete the private key share on each transfer…

liquid: the emergency timelock is 4032 bitcoin blocks, so more like 28 days

10 sats \ 0 replies \ @delta1 6 Feb

the SE needs to be trusted to … delete/overwrite the key share corresponding to the previous owner

https://github.com/commerceblock/mercury/blob/master/doc/statechains.md

0 sats \ 1 reply \ @joda OP 6 Feb

Yes but even with Liquid's emergency timelock feature, you are still dependent on a company to side with you and release your funds.

0 sats \ 0 replies \ @delta1 6 Feb

i never said otherwise.

regardless, if those emergency keys ever have to be used, it would be to process pegouts.

1 sat \ 1 reply \ @premitive1 6 Feb

why do I have to trust either of these things? give me more options!

149 sats \ 0 replies \ @joda OP 6 Feb

Ark?

I was trying to make it easy with fewer options! I just find it interesting that there has been so much development in x-chains over the last few years, and none of them (that I know of) have all the qualities that we would want in a Layer 2.

0 sats \ 0 replies \ @03479d0ee6 7 Feb

I think I would thrust Mercury more, I thought anyone can run an SE not only Commerceblock, I think Liquid might face more regulatory risk and it can be more centralized, because ok N members, is it hard for blockstream or the gov to put them all in a call? If more people run Mercury it could be harder to regulate.

0 sats \ 1 reply \ @karanjajes 6 Feb

I don't trust any of this. I'd rather use other forms of transactions. I don't use BTC for transactions,I just hodl

0 sats \ 0 replies \ @joda OP 6 Feb

If Bitcoin becomes a reserve asset and/or global money to a significant degree, there will necessarily be second layers.

I agree it's difficult to truly trust these. I see them as "services" rather than true layer 2.

21 sats \ 1 reply \ @Coinsreporter 6 Feb

Why don't we get away with both of these I don't transact with Bitcoin at all as of now. I am only HODLing and would only involve ne of these when Bitcoin hits $100k later this year

0 sats \ 0 replies \ @joda OP 6 Feb

Some people want to use these to increase privacy, or to DCL with low fees on the side chain.