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Andreas Antonopoulos, well-known Bitcoin proponent and author of Mastering Bitcoin did a Q&A session on YouTube recently in which he discussed Bitcoin’s Liquid sidechain and if it competes with XRP in use cases.
Antonopoulos begins by talking about the Liquid sidechain. He explains that it’s a product designed by Blockstream to be separate from the blockchain but connected via a two-way peg – a mechanism that allows assets to be transferred between the two.
Antonopoulos explains it as: “A separate blockchain that has a two-way peg whereby you can move money from Bitcoin to this other blockchain, use it and then move it back.”
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With Liquid, Antonopoulos explains that it’s a payment channel between cryptocurrency exchanges that allow them to move between themselves without having to burden the Bitcoin blockchain. He adds that when users make use of Liquid, 1 BTC is locked up on the Bitcoin blockchain which then becomes 1 Liquid BTC that can then be used on the Liquid sidechain with faster speeds and lower transaction costs.
Regarding whether or not Liquid’s sidechain will compete with Ripple for use case scenarios, Antonopoulos said: “I don’t think so.” He elaborated by saying “XRP has a very different model in both its consensus layer as well as in how the currency is used within the network. I think people interested in XRP are not interested in Bitcoin, even if it is implemented through Liquid’s sidechain.”
He added that “there is a spectrum of applications here, whether it's from payment channels or atomic swaps… and there is some overlap in some of those applications but I don’t think the overlap is enough to really make these systems compete against each other.”
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