Recently, the smart-contract enabling protocol, RGB, confirmed it’s Beta launch, for Bitcoin-based smart contracts. Smart contracts are native to the Ethereum network and rarely Bitcoin-based. The rare bitcoin-based smart contracts are due to people believing that; bitcoin’s paired down scripting language cannot support the smart contract applications.
However, the LNP/BP ( Lighting Network Protocol and Bitcoin Protocol) group is changing the rare bitcoin-based smart contracts; that is ,by introducing a smart contract built on bitcoin. The RGB smart-contract enabling protocol got its name from the RGB additive coloring scheme. The additive scheme initially began as a project to enhance Bitcoin’s colored system for tokenized assets.
The Protocol’s Application
Giacomo Zucco, RGB architects, calls the beta smart contracts a third layer network, adding that they could help outfit bitcoin with the tokenizing capabilities. One use case for the new smart contract is to issue tokenized assets such as securities, collectibles, crypto dollars, and many other assets.
Beta smart contracts will also help avoid double-spending; it happens because RGB design is a client-side validation design. In turn, it means that when an individual sends you an asset, they cannot publish the transfer on the network. Transfer of assets is peer-to-peer, and the use of the public system, in this case, is to prevent double-spending.
The new smart contract, Beta, will enable the issue of nonfungible tokens (NFTs). They are unique tokens that stand in place of digital collectibles, with a classic example being CrytpoKitties. Beta smart contract will facilitate sending a computer file for the NFT in the sane transaction as the asset that it represents. Moreover, RGB enables the transfer of both assets and collectibles in the same channel.
RGB contracts also offer strong privacy since all transactions here get handled off-chain. It’s smart contracts are even more private than even the Lighting Network. One can’t track an RGB asset on the blockchain because one only sees its history after receiving it, but the asset gets obfuscated cryptographically. The process involves using Confidential Transactions technology whereby one cannot see where an asset goes after sending it.
RGB is a smart contract system that functions on the Lightning Network, programmed with high privacy and scalability. This smart contract gets maintained by LNP/BP association and was initially envisioned in 2016 by Giacomo Zucco and Peter Todd.
The functions of RGB include issuing of digital fungible assets such as stocks, bonds, and other types of securities. This smart contract system also creates various forms of collectibles and also creates and manages decentralized identities. RGB also designs and operates other forms of arbitrary-complex smart contracts.