ConsenSys, a blockchain technology company, and Ethereum have developed BTC Relay , an Ethereum contract that allows Ethereum users to pay with bitcoin. Servicing as a bridge between Ethereum and bitcoin, BTC Relay is a tool for developers who want to verify bitcoin transactions for Ethereum and smart contract applications. Community members, called Relayers, provide BTC Relay with new bitcoin block headers generated by bitcoin miners. Ethereum app developers can make API calls to BTC Relay from smart contracts to verify bitcoin network activities. Anyone can join the Ethereum network and become a Relayer. There is no hardware or electricity cost. How It Works BTC Relay uses the block headers to build a small version of the bitcoin blockchain. The method is also used by Bitcoin Simplified Payment Verification (SPV), a scheme described in section 8 of the original bitcoin white paper . Relayers send the block headers to BTC Relay. When a transaction is verified in the block, or the header is retrieved, Relayers are rewarded a fee. The fees are sent when transactions are verified in the block or the header is retrieved. The Relayer of the header earns a fee that is usually specified when the Relayer submits the header. The cycle of Relayers submitting headers – then applications processing bitcoin payments and rewarding Relayers with fees – enable the system to be self-sustaining and autonomous. Details are available on GitHub ( https://github.com/ethereum/btcrelay/tree/master#incentives-for-relayers ). An Open Source Project ConsenSys launched BTC Relay in May, describing it as an open source project allowing Ethereum-based networks to interoperate programmatically with the bitcoin network, and eventually integrating with other Ethereum and bitcoin-based systems. BTC Relay does not grant special privileges to any party, ConsenSys noted in a press release . Ethereum developers can use BTC Relay to implement a […]
