Last night XCredits successfully demonstrated using XSPOCT to do arbitrary asset token exchange on Bitcoin, with full anonymity and the full security of the Bitcoin blockchain. We previously demonstrated (video & whitepaper) that you can use the XSPOCT Note system to transfer burnt Bitcoin between individuals in a completely private yet secure way.
We generated a pretend token “FakeUSD”, issued by “Fake Bank”, where the Fake Bank generated $40,000,000 in tokens redeemable for USD at a Fake bank branch.
Alice then creates a burn transaction which establishes that she is creating an XSPOCT Note for this asset. The output address of the transaction is a burn address. In this burn address we are establishing:
What token is being created
Which address to look at to establish what the next transaction is.
Process for hashing information in the initial burn
Alice then sent Bob $20,000 USD by:
Asking Bob to send the hash of his instructions for the next transaction, then
Generating output information, and
Sending a transaction from address ‘2xxx’ to the burn address generated by hashing the outputs.
In a similar way, Bob sent Charlie $20,000 USD .
Transferring the token between parties involves generating hashed output addresses which can prove where to look for the next transaction.
This is a huge step forward for Bitcoin and the crypto community in general, as tokens can now be generated and traded on Bitcoin. It provides another method for external parties (like banks) to interact directly with the blockchain.
XSPOCT Asset tokens do not require a change to Bitcoin or a separate chain. It uses Bitcoin as the backbone infrastructure.
This is only a proof of concept, and there is a fair bit of work to do in building the validator, and a usable interface for users.
We’ve open sourced the code on Github. Check out:
The ‘xspoct.js’ library,
The creation of an XSPOCT for sending assets using ‘create-and-send-xspoct.js’ and
The creation of an XSPOCT for Bitcoin transactoin in the file ‘create-and-send-xspoct.js’.
Based Blockchain Network