Fractal Bitcoin is a recently launched project that bills itself as “the only fully scalable and rapidly compatible native solution for Bitcoin. It is actually an integrated mining system that presents itself as a side-layer of the second layer of Bitcoin, where many levels of “sidechains” can be stacked on top of each other. So think of the side chain of the mainchain, the sidechain of the sidechain, the sidechain of the sidechain of the sidechain, etc. That’s not the case.
Shitcoins Are Not Second Layers
First, the entire system is built around a new native token, Fractal Bitcoin, which is issued completely independent of Bitcoin. It even comes with a large amount of pre-mining 50% of the offering divided between “ecosystem wealth”, pre-sales, advisors, community grants, and developers. This is essentially the same as the first time Bitcoin was split when the block grant was 50 BTC per block. From here the network jumps to 25 Fractal Bitcoin (FB) per block.
Second, there is there is no foolproof way to move real bitcoin to the “sidechain.” Yes, you read that correctly. They act as a sidechain/second layer, but there is no real way to move your bitcoin back and forth between the mainchain and the “sidechain” Fractal Bitcoin. It is a completely independent system with no real ability to move money back and forth. One of the key features of a sidechain is the ability to attach, or “lock,” your bitcoin from the mainchain and move it to the sidechain system so you can use it there, eventually returning those funds to the mainchain.
Fractal Bitcoin has no such method, and not only that, the discussion around the topic in their “technical litepaper” is completely inconsistent. They discuss Discrete Log Contracts (DLCs) as a way to “connect” between different levels of Fractal sidechains. DLCs are not the perfect way to nail it at all. DLCs work with to explain before where coins will be sent based on a signature from an oracle or a set of oracles expected at a given time. They are used for gambling, financial products such as derivatives, etc. between two parties. DLCs are not designed to allow funds to be sent to any arbitrary location based on the outcome of the contract, they are designed to allocate funds to one of the two participants, or equally to each participant, based on the outcome of a specific contract or event. the oracle opens.
This is not applicable to a sidechain or other system peg, which is designed to allow any current owner of coins on a sidechain or second layer system to freely send coins to any destination they choose as long as they have control over them. another plan. So not only is there no way to nail down a live system, but waving their hands about potential designs for one in their paper is completely inconsistent.
The whole “design” is a clown show designed to pump the wallets of the pre-mining owners.
“Cadence” Mining
Another worrying aspect of the system is its unique combination of mining, Cadence mining. The network uses SHA256 as the hashing algorithm, and supports standard Namecoin-style hashing. But there is a catch. Only one-third of the blocks produced in the network can be produced by Bitcoin miners participating in the mining pool. The other two-thirds must be mined normally by miners who convert their hashrate to Fractal Bitcoin.
This is a toxic motivational structure. It tries to integrate itself with the Bitcoin network calling itself a “mining integration system”, while in fact two-thirds of the block production authority removes the risk of securing the Bitcoin network and dedicates it only to the discovery of Fractal Bitcoin. Most of the reward is not captured by the miners who continue to mine Bitcoin, and the larger the amount of FB the greater the incentive for Bitcoin miners to not use it and start mining instead of bitcoin to increase the share of the FB reward they capture.
It basically acts as a disincentive to Bitcoin miners in proportion to the value of the entire system. And it offers no benefit in terms of security at all. Enforcing this choice ensures that most of the network difficulty should remain low enough that any small fraction of miners find it profitable to leave Bitcoin to FB unable to mine blocks in the target time of a 30 second block. Conventional mining will allow the entire mining network to offer security without having to deal with the opportunity costs that Bitcoin incurs.
What’s the Point of This?
The main point of the network is to simplify things like DeFi and Ordinals, which consume a large amount of blockspace, by giving them an implementation system outside the mainchain. The problem with this logic is the reason those systems are built on the mainchain in the first place is because people value the immutability and security it provides. Nothing about Fractal Bitcoin architecture offers the same security guarantees.
Even if they did, there is absolutely no effective method of attachment making it easier for these assets to be interoperable between the mainchain and the Fractal Bitcoin chain. The whole process is a series of hand waves that go through important technical details to accelerate some marketing that allows insiders to profit from the previous mine involved in the launch.
There is no peg machine, a disjointed “mining pool” system that not only creates toxic distortions if it continues to increase in value, but actually ensures a low level of proof of work security, and a bunch of names. It has a working CAT, but so do the existing testnets. So even the argument as a place to test things built using CAT is also inconsistent with the limited measurement part of the pre-mined token pump.
Calling this a sidechain, or a layer of Bitcoin, is beyond ridiculous. It’s a token system, pure and simple.