There is no denying that blockchain gateway is a complex technical enterprise that puts together several independent systems. In this article we will give a more detailed description of how the proposed system may work.
Blockchain gateway is a solution, comprised of a set of technologies, that allows for the establishment of relationships between currencies in separate blockchains. It is aimed at solving the issue of avoiding complex technical integration when attempting to increase token presence on the market.
In the context of Bytecoin, the blockchain gateway system consists of three elements: an Auditable Wallet, a smart contract in an outside blockchain and a public dashboard. Here is a short rundown on what each of the subsystems would do in a potential ERC-20-based gateway:
The Auditable Wallet, a wallet, based on the new cryptography, that allows everyone to verify the amount BCNs backing the BCN tokens (in this case Ethereum ERC-20 tokens emitted for Bytecoin deposits);
The smart contract that makes it possible to mint ERC-20 tokens for Bytecoins to be used in the Ethereum ecosystem;
The public dashboard, a platform that verifiably certifies the relationship between the amounts of BCNs and Bytecoin ERC-20 tokens in real time.
The Auditable Wallet
Bytecoin’s new Auditable Wallet system is the technological foundation of the solution. The new cryptography under Bytecoin’s hood prompted the developers to recreate observable wallet functionality with new tools. To be concise, an owner of the dedicated key has the ability to see the balance, income and spendings of a certain wallet without being able to spend funds from it.
Such wallets can be distributed among an unlimited number of users and allow them to see the amounts of deposits, withdrawals and balances of the addresses in that wallet. This system is perfect for the described application. Such a wallet can be put online and serve as a proof of backing.
The smart contract
The smart contract serves as a unit denoting the emission of all Bytecoin ERC-20 coins. The theoretic total maximum supply of such coins is 264 - 1 - equal to that of Bytecoin. Every 1 Bytecoin ERC-20 token is backed by 1 Bytecoin.
One of the most prominent technological solutions for facilitating such functionality is ERC-20. ERC-20 is the technical standard used for smart contracts on the Ethereum blockchain for producing tokens. At the time of writing this article, a total of more than 165 000 ERC-20 compatible contracts were created in the Ethereum network. ERC-20’s time-tested reliability and ubiquitous acceptance make it the perfect option for this kind of application.
The Public Dashboard
The dashboard is a web-interface for Bytecoin’s Auditable Wallet and the Ethereum smart contract. The information displayed by the gateway can be obtained easily: Bytecoin’s Auditable Wallet can be queried with daemon functionality and Bytecoin ERC-20 token information can be taken from the Ethereum blockchain.
It is crucial that the amount of BCNs should be greater or equal to the amount of Bytecoin ERC-20 tokens in circulation (excluding the owner’s smart contract address). Thanks to publicly available blockchain information, the interface can add up the amounts of Bytecoin ERC-20 tokens bought and put this number against the amount of BCNs in an Auditable Wallet. In addition to the web interface, a person can verify the amount of backing BCNs by opening the auditable wallet file in native desktop application.
While these details give an accurate representation of how this technology could work, it is important to remember that the technology is still developing. Potentially, the gateway project stands to expand Bytecoin’s community and provide members with an increased level of flexibility in their actions.