Many people are starting to pay attention to Bitcoin’s RGB protocol and are really happy. However, most people are relatively unfamiliar with such a protocol (especially a relatively technically complex protocol), and do not know how to research and try the content and ecology of the protocol.

Therefore, I specially write a continuously updated Mirror to summarize relevant learning materials and provide a relatively reasonable learning path; at the same time, it also serves as a record of personal learning about RGB.

Table of contents

Part One: Popular Science Part-Initial Understanding of RGB

1. What is RGB
2. What can RGB do
3. What are the characteristics of RGB
4. RGB technology points
5. RGB protocol development history
6. Current status of RGB protocol
7. My vision for the future of the RGB protocol

Part 2: Agreement Part-Understanding LNP/BP

1. Get to know the LNP/BP Association
2. LNP/BP standard analysis

Part Three: Summary of Frequently Asked Questions

1. Why are there various types of BTC addresses?
2. When using some BTC wallets, why is the wallet address different after each use?
3. What is the first asset on RGB?
4. Are RGB transactions real-time on the chain?
5. Introduce what exactly RGB can do?
6. What is the relationship between the RGB protocol, the main network, and the Lightning Network?
7. There are often problems with the Lightning Network at present. Why not choose to run on the side chain? And why do foreigners prefer the Lightning Network?
8. The LNP/BP Association only accepts donations. Will it affect the development progress?
9. Is TEDA going to issue stablecoins on RGB?
10. To what extent has the RGB protocol developed so far?
11. Introduce the various projects under the RGB ecosystem?
12. The on-chain security of RGB can be understood, but how to understand the off-chain security?
13. Where is RGB data stored?
14. Let’s talk about the relationship between sideswap and liquid?
15. RGB is stored off-chain, so is the security of off-chain data guaranteed by the project? If there is a problem with the project side’s data, is it possible that there will be a problem with the assets? Is it possible that the project party is doing evil?
16. Through Storm nodes, can data be interconnected between different project parties and achieve data decentralization?
17. Because the RGB protocol is private, outsiders cannot see personal transaction data. Can the project provide personal transaction, transfer and other information?
18. Is it possible that there will be a Liquid-like asset security (AMP) that must be disclosed to the outside world, so that assets that must meet certain regulations must be disclosed to the outside world?
19. How to prove that an asset is an RGB asset?
20. Since assets between different projects cannot interoperate, is it possible to have a common asset layer?
21. Can RGB be connected to different chains such as Liquid and other L2? What form does the asset take? Does it have to conform to the RGB asset specification?
22. If RGB is built on the Lightning Network, can it be considered like this: RGB data is recorded off-chain, payment data is confirmed through the Lightning Network, and Lightning Network data is uploaded to the Bitcoin main network through multiple modes for confirmation?
23. Due to the particularity of RGB asset transfer, which requires confirmation from both parties, is it difficult to build an amm mechanism similar to uniswap? Can this be achieved by letting users authorize certain permissions in advance?

Part 4: Reference links

1. RGB technology official website
2. RGB BLACKPAPER
3. Official FAQ document
4. AluVM virtual machine
5. High-quality RGB protocol analysis report

Part One: Popular Science Part-Initial Understanding of RGB

1. What is RGB?

When many people see the three words RGB, they think of “the three primary colors: red green blue”. If you look at the icon, this is really the case. This is because the RGB protocol utilizes the early concept of “dyed coins”.

Here we are talking aboutRGB isan agreement,An extremely private, scalable smart contract system protocol that can run on the Bitcoin mainnet, Lightning Network, or similar networks。

This protocol is currently maintained and updated by the LNP/BP protocol, and bitfinex also participates in some code work.

It is difficult to simply classify RGB into the category of Bitcoin L2. It does not have its own chain, it does not have its own layer, and it can operate on other L2s of BTC. Therefore, to be precise:It is a universal technology。

In the industry, it is generally believed that RGB and Bitvm will be the ultimate form of BTC expansion, because they can both achieve the scalability of the BTC ecosystem based on the native nature of BTC. Compared with Bitvm, which is far away,RGB has been gradually implemented。

It is worth mentioning that RGB is a technology that is not limited to crypto. It can be widely used in our non-crypto scenarios. As the protocol becomes more mature, we will see more and more use cases.

2. What can RGB do?

From the official introduction, we can see the functions that the RGB protocol can achieve:

1. Issuing digital fungible assets such as stocks, bonds, and other forms of securities;
2. Create different forms of collectibles (non-fungible assets);
3. Create and manage sovereign/decentralized identity and reputation systems;
4. Create and maintain provably unique historical records of certain events that can be used for auditing through well-controlled partial data disclosure;
5. Design and run other forms of smart contracts of arbitrary complexity

If we classify it, we can see:

1. Can issue assets (token, nft, domain, etc.)
2. Can be used as data layer
3. Can make smart contracts

From this perspective, RGB allows BTC to have most of the functions of the current EVM, but it is not implemented in a non-native form similar to “EVM compatible”, but implemented natively. I have to say that this set of theories and designs The concept is awesome.

In fact, it is worth noting that the RGB smart contract system is very different from previous methods, whether based on Bitcoin (Colored Coins, Counterparty, OMNI) or non-Bitcoin (Ethereum, EOS, etc.), it has its own Unique features:

1. RGB distinguishes the concept of smart contracts:Issuer、state owner and state evolution;
2. RGB keeps smart contract code and data off-chain;
3. RGB uses blockchain as the state commitment layer and Bitcoin script as the ownership control system; while the evolution of smart contracts is driven by off-chainmodeland useCompleted in simple language

The first meaning is that smart contracts will be better stratified. The issuer only has the rights to the contract at the moment of issuance, and then the state owner will have the rights during the continuous state evolution process;

The second meaning is that it keeps the code off-chain, which can save on-chain space, improve running speed, and reduce development difficulty, but it can also ensure security through mechanisms;

The third article reveals its security endorsement layer (blockchain), and it is Turing complete and can support simple language operations.

Therefore, the following picture may be closer to the correct understanding:

3. What are the characteristics of RGB?

From Dr. Maxim Orlovsky’s teaching video, we can see that the officially recognized RGB characteristics include:

1. Extreme privacy
2. High security
3. Scalability
4. no congestion
5. Extremely high integration

Let’s break it down one by one:

1️⃣Extreme privacy

1. Data is known only to the owner, not to the whole world. Because RGB does not use traditional global consensus, but uses client verification, there is no need to broadcast data to the world. Only two clients that can be connected to each other can establish a consensus only with each other, and only each other knows the data (if not shared with the outside world);
2. The amount is confidential, and Pedersen Pledges and Bulletproofs combine the best features of Liquid and Grin. Similar to the ct (confidential) concept on Liquid, others cannot see the asset type and asset amount of the specific transaction.
3. Merkelization and partial data revealing features keep a lot of past history private, even from future owners. In principle, RGB’s last transaction needs to be traced back to all previous records related to the transaction, but the partial disclosure function will make this process simpler, and will also protect the historical information on the chain to maintain a certain degree of privacy;
4. There is no way to extract RGB-specific data from the Bitcoin blockchain or Lightning Channel transactions. In other words, it is impossible to analyze the information from the data submitted by RGB on the chain, because they are all private, which also means that traditional analysis of RGB will be difficult to achieve.

2️⃣High security

1. State isolation: The state is isolated, and contracts can only interact through the special protocol (Spectrum) within the channel.
2. Formal verification: Contract properties can be proven using formal models.

I don’t quite understand these two points, I need to study them.

3️⃣Highly scalable

1. Not limited by blockchain scalability, works on Lightning Network and any other channel. It is not only used for Bitcoin or Lightning Network, other blockchains may also be applicable. That’s why I say RGB is a general technical category and is not the same thing as the existing BTC ecological division system.
2. Compared to blockchain-based smart contract systems, the amount of data retained by clients for full verification is significantly reduced. Because it is extremely private, you only need to keep the data related to your transactions, and the client does not need to save all the data.
3. Smart contract-level sharding: Multiple contracts maintain independent historical records. Keep contracts independent and non-interfering.

4️⃣No congestion

1. Transactions only retain homomorphic commitments, no additional storage is required

5️⃣Extremely high integration

1. It can be integrated with Taproot, Schnorr, eltoo, multi-party lightning network channels, DLC…
2. It can also be integrated with existing L2, such as Liquid, etc.

So, in fact, in my eyes, RGB for BTC is more like the following:

4. RGB technology points

Compared with other protocols, the RGB protocol has its own very unique technical points. Here are a few important parts of simple science:

4.1 Disposable sealing

This technology was first proposed by Peter Todd in 2016. Its main meaning is to “add a seal to a message to ensure that the message can only be used once, because you must remove the seal to know the message.”

A simple method is to set up a notarized third-party server that publishes a certificate in a public registry whenever a seal is opened or locked, so that anyone can verify the status of the seal they care about.

If you do not use a trusted entity to implement the one-time seal function, you can use Bitcoin’s UTXO as a seal. Because any UTXO in Bitcoin can only be spent once. Therefore, using UTXO as a seal, you can lock the UTXO when it is created and open it when you spend it.

RGB utilizes such a “one-time sealing” technology, which “wraps” RGB asset information, contract status, etc. in UTXO. When UTXO is spent, the ownership of the asset and the status of the contract change. This means that every time an RGB transaction occurs, the sender actually creates a contract (the one that defines the rights being transferred).status change。

Take RGB20 as an example:

1️⃣First, the issuer of the contract sets the founding state of the contract and defines the details of the contract: the name of the asset, the total supply, etc., and the issuer has the right to move the UTXO of these supplies;

2️⃣When an asset is transferred for the first time, the owner of the first UTXO can create a state change to define which UTXO will hold the asset;

3️⃣State change can be applied to the right to change the ownership of the asset, or to other types of rights, such as the right to secondary issuance, or the right to add/change specific attributes of the asset (for example: metadata), etc. .

4.2 Client verification

RGB verification is different from the traditional “global consensus” verification and uses “client verification” technology.

With traditional Bitcoin verification, a node connected to the network continuously downloads and verifies blocks and transactions in a transaction pool (full node). Such a node has a real-time updated view of the UTXO set on the entire chain (the set of all unspent outputs on the blockchain). When it sees a new transaction, to verify its validity, it only needs to verify All inputs to the transaction are part of the latest state of the UTXO set.

But for RGB, there is no globally propagated data, so there is no such global view of the UTXO set. After an RGB client accepts a transaction, it not only needs to verify that the latest state of the transaction is valid, but also must perform the same verification on all previous state transformations related to the transaction, all the way back to the founding state of the issuing contract.

This seems to bring about an obvious disadvantage:Causes verification to take a long time

But this only occurs when “an asset has a long trading history,” and this part of the trading history can be verified in advance through a data sharing layer (on a voluntary basis).

This also brings significant advantages:The client does not need to know or verify all transactions that occur globally

Because it only needs to know the transactions related to its own wallet, it does not need to verify other transactions, so the amount of data to be verified by each client is smaller, and the system scalability is significantly enhanced.

4.3 Bitcoin’s promise of certainty

How RGB prevents “double spending” is achieved through RGB commitments. Such commitments need to be realized:

1️⃣Multiple state transitions involving a contract can be committed to a single Bitcoin transaction

2️⃣Each contract state transition can only be committed to a Bitcoin transaction once

The specific way to achieve this is:

1️⃣First, all state transitions related to a certain contract (or asset ID) must be deterministically aggregated into a commitment

2️⃣Then, the commitments of all transferred assets are aggregated into a Merkle tree

3️⃣The final root hash value is the final RGB commitment;

4️⃣In order to ensure compatibility with other protocols that have nothing to do with RGB but also need to use deterministic Bitcoin commitments, the RGB commitments and the commitments of other protocols must be aggregated again (as described in the LNPBP-4 standard), and the hash obtained in this way The value is the message that is actually embedded in the Bitcoin transaction.

4.4 Batch processing

As we can know from the previous section, we can “wrap” any number of state changes in a single Bitcoin commitment, so large-scale batch processing is theoretically possible.

Scenario:A wants to pay multiple people at the same time, transfer an RGB20 asset to B, transfer an RGB21 asset to C, and transfer the ownership of a contract to D

Result:A only needs to create a state transition for each of B, C, and D, and commit all state transitions to the same Bitcoin transaction. That’s it. It doesn’t need to occupy more bytes. This means that the marginal cost of on-chain fees for each RGB payment can be very small, because the same fee is spread evenly across any number of transfers.

But we also need to see the limitations here, that is: these state transition information must be “wrapped” in the same UTXO. If there are multiple, then the input of this transaction needs to be increased, and the corresponding costs will also be improve. But compared to the traditional situation where each one requires a transaction, great improvements can be achieved.

This batch processing capability is very important for service providers who use merged UTXO, and there will be many application scenarios.

4.5 Communication between clients

In order to complete an RGB transfer, participating clients need to share some data with each other.

If you have a detailed understanding of the transfer steps of RGB assets, you can know that the sender needs to share the consignment with the recipient(s).This data structure contains all the information needed to verify the transfer, including all state transitions that can be traced back to the contract’s founding state.

The consignment needs to be transferred from the sender to the receiver through communication, but the RGB protocol does not care about the communication channel used for this data sharing operation, because there are many ways to do it. However, as a whole, there are two main ways to share data in RGB software:

1. Storm: A peer-to-peer instant communication and storage system based on the Lightning Network.
2. RGB Proxy Server: A standardized HTTP JSON-RPC server whose clients can upload and download data. Users can run their own proxy servers or use third-party servers. Relying on a third-party server affects privacy and censorship resistance, but not security.

5. Development history of RGB protocol

After having a general concept of the RGB protocol, I think at this time, we can understand how the protocol developed step by step. Any agreement at this level is not achieved overnight and must have gone through many changes and innovations.

envisioning stage

RGB was originally conceived by Giacomo Zucco and Peter Todd, who proposed the client-side authentication and one-time sealing concepts

development stage

Initially, it was maintained by BHB Network and inbitcoin for a period of time, and was supported by Poseidon Group.

Later, the main developer became Alekos Filini

Since mid-2019 to date, Pandora Core AG and Dr. Maxim Orlovsky have become major contributors to technology development

Gradual maturity stage

Since 2019, the RGB protocol has received help from many contributors and industry organizations and has gradually matured. and is a project based on a set of standards maintained by the LNP/BP Standards Association.

For example: At this stage, RGB was reconstructed from a token protocol to a general smart contract system, absorbing many parts of confidential transactions, and using Blockstream’s bulletproof technology. The overall work was financially supported by Bitfinex/Tether Inc and Fulgur Ventures. (This is also the basis for the continued development of the RGB protocol)

Adam Back’s advice and Blockstream engineers played an important role in the technical design of its RGB, including Andrew Poelstra (Bulletproof, mimblewimple, Confidential Transactions), Peter Wuille (Confidential Transactions, Bulletproof) and Christian Decker (Lightning Network, Systems) architectural design )work. So this is another important reason why I pay attention to Liquid. On a theoretical basis, the two have a lot of exchanges, and I am very optimistic about the combination of the two in the future.

6. Current status of RGB protocol

The main protocol development work of RGB is almost completed. In the v0.10 version, asset issuance and other functions can be easily used. However, some problems were encountered when connecting to bolt-ln (current bolt lightning network), so the bifrost standard was designed. The protocol is used to expand smart contracts and further proposes the Storm standard.

The v0.11 version is currently undergoing a security audit and is expected to be completed and released in early 2024. The v0.11 version is a major update compared to v0.10. The contracts between the two are definitely no longer compatible. There may be plans to exchange assets by then. There may or may not be a bridge. After all, the current versions are all test versions.

I rather expect that the v0.11 protocol version will become a large stable version, which will bring a certain degree of certainty to the development of ecological projects under the protocol.

Next, let me talk about the existing problems of the RGB protocol in detail:

1️⃣Slow development progress

This problem has been criticized by many people, and the reasons are caused by many factors:

—The LNP/BP Association has very few developers, and the main code work is completed by Dr. Maxim and Bitfinex

—LNP/BP is a non-profit organization, and its operations basically rely on donations. Although it has financial support from Bitfinex/Tether Inc and Fulgur Ventures, the use of funds also requires careful planning (for example, if you want to hold an offline conference every year, you may not have a budget)

2️⃣ Strong instability

This instability refers to “the extent to which protocol updates may break older versions.

For example, this time v0.10 will cause greater uncertainty due to the contract damage (incompatibility) of v0.11.

If the ecological projects under the protocol develop functions based on v0.10, they may need to be redone in v0.11, which will bring high risk costs. But from the perspective of the association itself, it is for overall renewal and planning, and will not consider this issue at this stage.

3️⃣Mismatch problem

The association itself considers the overall development plan of the agreement, which may not necessarily match the needs of the market.

4️⃣Insufficient attention to funds

At present, there are very few big funders paying attention to RGB. Institutions are still immersed in narratives that can be seen quickly, such as inscriptions. There is not enough attention to large and in-depth protocols like RGB, so the development of the ecology is temporarily There hasn’t been much improvement (although it’s better than before, but I personally think it’s due to the spillover effect of funds)

7. My vision for the future of the RGB protocol

When expressing my opinions, I like to give my reasons very much, because this is also the basis for my judgment; I don’t like to call orders and fomo without thinking, because that is not in line with my true intention. So, let’s sort it out first:

—The ecological development of BTC is the result of the common hope of current miners, old funds, etc., and a new narrative is also needed in the market;

—The basic technical conditions for the development of the BTC ecosystem are already in place, of which taproot upgrade is a very important part;

—Asset issuance is the first step in ecological development. Without assets, nothing can be done. So we can see various protocols based on the issuance of assets on Bitcoin, and gradually overflow to other public chains;

—Ecological development cannot just be the issuance of assets, it can only be the first step. The second step is to implement application scenarios for these assets, that is, to process and exchange assets, etc. This requires smart contracts, which can be simple to complex;

—Of the current protocols, the only native ones I have seen are RGB and Bitvm, and as I said before, RGB is more practical.

This is why I like him!

However, the development process of things is often not as consistent as imagined. Let’s use a picture to express it:

Part 2: Agreement Part—Understanding LNP/BP

1. Get to know LNP/BP

LNP: Lighting network protocol (Lightning network protocol)

BP: Bitcoin protocol

This is a Swiss non-profit organization,Responsible for overseeing the Layer 2 and 3 open standards and protocols for Bitcoin and the Lightning Network. They are the creators of L2 and L3 protocols such as RGB, Bifrost, Storm, Prometheus, Kaleidscope, and are active builders of the #BiFi (Bitcoin Finance) ecosystem on the Lightning Network. The association consists of@dr-orlovskyand@giacomozuccoFounded in 2019

Official website link Twitter link github link

Github contains a large amount of open source information about RGB and related protocols. Technical friends can take a closer look.

LNP/BP has a very strong lineup of donor organizations, including:

Moreover, TEDA has stated many times that it will issue USDT on the RGB protocol and promote the development of the RGB protocol!

2. LNP/BP standard analysis

2.1 LNPBP-1: Public Key

to be continued…

Part Three: Summary of Frequently Asked Questions

In this part, I will continue to summarize and update various issues related to RGB and BTC technology encountered in learning and community operations in this place.

Q1. Why are there various types of BTC addresses?

There are four main types of bitmap addresses:

1️⃣Legacy/Payment Public Key Hash (P2PKH) address

This kind of traditional Bitcoin address is the form of the address when it was created in the early days, so it is also called a “legacy address” or a “payment public key hash (P2PKH) address” because when Bitcoin was launched in 2009, its generation method was Starting with the generation of a public/private key pair, which at the time was the only way to create an address.

This type of address all starts with “1”. Because it uses the most space in transactions, it is also the most expensive address type.

2️⃣Pay-to-Script-Hash (P2SH) address

This type of address does not use the hash operation result of the public key, but uses the hash operation of certain scripts to record demerits, and can be used for transfers that require multiple signatures, etc.

This type of address starts with “3” because you can use Segregated Witness to save transaction fees, sending to a P2SH address is about 26% cheaper than a wallet using the old address.

3️⃣Segregated Witness Address (SegWit) Bech32 Address

Segwit addresses are also known as Bech32 addresses. This type of Bitcoin address reduces the amount of information stored in a transaction. They do not store signatures and scripts in the transaction, but in the witness (commit).

This type of address starts with “bc1q”. Compared with P2SH addresses, Segwit addresses can save about 16% of transaction fees, and compared with traditional addresses, they can save more than 38% of fees.

4️⃣Taproot address

To increase block space efficiency and improve fees, SegWit has introduced some changes in how addresses are constructed. Therefore, based on the SegWit address, the Taproot address was developed, which is translated as the main root address.

This type of address starts with “bc1p”, which further reduces storage space, improves transaction efficiency, and provides better privacy.

Q2. When using some BTC wallets, why is the wallet address different after each use?

This is a commonly used technical method on BTC: HD Wallet

This technology allows a pair of “public and private keys” to generate countless sub-public keys, which are the addresses we see; this feature is to protect the privacy of Bitcoin wallet users.

Because in traditional use, in order to confirm transactions, users will expose their public keys, then there is a risk of revealing their true identity (which can be continuously tracked), but after using HD Wallet, after every use, Convert it to another sub-public key so it cannot be traced.

For details, please refer to the following documents:

HD Wallets | Hierarchical Deterministic Wallets

An explanation of what an HD Wallet is, how they work in Bitcoin, and their history.

learnmeabitcoin.com

Q3. What is the first asset on RGB?

Many people will argue about the title “first” because people like to chase the first

If you want to talk about the first asset on RGB, it was probably released when Dr. Maxim himself tried it. Of course, neither you nor I saw it.

If you want to talk about the RGB sample assets opened by the LNP/BP Association, you can refer to the following website

rgbex.io

rgbex.io

If it is an asset issued on the project party bitmask under the RGB protocol, you can refer to the following website

BitMask Wallet

The Browser Extension for Decentralized Applications on Bitcoin. Access Bitcoin Finance, NFTs (UDAs) and more using RGB protocol…

beta.bitmask.app

But bitmask is only a project party under the RGB protocol, because RGB is “client verified”, so as long as you can build a client, you can also use the “command line” to issue your own “first RGB asset”

Therefore, I think arguing about who is number one is meaningful for short-term publicity, but in the long run, the value contained in the assets is more meaningful. This value may be community spirit, empowerment, etc.

Q4. Are RGB transactions uploaded to the chain in real time?

In fact, you can’t ask this, because: RGB uses the Bitcoin network for “security endorsement” and “prevention of double spending”. In principle, it can be used on any other network with such characteristics.

If the RGB transaction runs on the main network, then its transactions are uploaded to the main network in real time; if the RGB transaction runs on the Lightning Network, then its transaction data is uploaded to the Lightning Network in real time, and the data of the Lightning Network is stored off-chain. Yes, it will only be chained on the BTC main network at the moment of withdrawal; if RGB transactions run on other networks, the data chaining situation will also be determined based on the conditions of other networks.

It must also be pointed out that the actual transaction data of RGB is stored on the client, and what is uploaded to the chain is the aggregation of transaction commitments.

Q5. Please introduce what RGB can do?

For me, I think RGB is a general technology that can be connected to L1/L2/L3. It can do many things and is a very critical part of the development of BTC ecology; it can realize BIFI, that is, bitcoin+fi, which can It is defi, nftfi, gamefi, or other forms of fi

In fact, many people pay attention to the application of RGB in crypto, but RGB can do more, such as bonds, treasury bonds, the combination of real assets and virtual assets, etc.

Q6. What is the relationship between the RGB protocol, the main network, and the Lightning Network?

The RGB protocol can run on the main network, on the Lightning Network, and even on side chains in the future.

RGB is designed to run on the Lightning Network for the sake of scalability. Because of running smart contracts, the tps of the main network obviously cannot meet this requirement. The high tps of the Lightning Network can, but the current Bolt Lightning Network cannot. It meets the complex smart contract requirements of RGB, so it needs to be upgraded to bifrost to become complete;

Q7. There are often problems with the Lightning Network currently. Why not choose to run it on a side chain? And why do foreigners prefer the Lightning Network?

The current problem is due to the size of the Lightning Network channel, and the Lightning Network was originally designed for small payments; of course, if you build a large channel yourself, you can also make large payments (generally large amounts go to the mainnet) )

I think there are two reasons why Lightning Network is used instead of side chains:

1️⃣ Side chains are generally considered not native enough, because side chains have their own chain, their own nodes, their own blocks and their own consensus mechanism. You can even say that it has little to do with the BTC main network; but Lightning The network can be understood as something hanging on the BTC main network. It is very native and is called L2.

2️⃣The theoretical TPS of the Lightning Network is much higher than that of the side chain

Q8. The LNP/BP Association only accepts donations. Will it affect the development progress?

I also have this kind of worry, especially since there don’t seem to be many donations at the moment (in fact, the return rate on investments like TEDA is very high), but I still appreciate the spirit of the association in a non-profit way. Do such great things.

Mainly speaking, most of the work on the RGB protocol has been completed. Of course, there are still many tasks to follow; I think if the RGB protocol gets more and more people’s attention, as more and more devs join, the development work will change. quick.

Q9. Is TEDA going to issue stablecoins on RGB?

Yes, and multiple times

Q10. To what extent has the RGB protocol developed so far?

As of December 17, 2023, everyone is waiting for the update of v0.11. This update involves updates to smart contracts, wallets, etc.; we hope that v0.11 will become a larger stable version, so that projects in the ecosystem can A relatively safe development.

If v0.11 is released, the issuance and transfer of RGB assets based on the Lightning Network will soon be realized (it will be very fast), but complex smart contracts still rely on the development of the bifrost Lightning Network.

Q11. Introduce the various projects under the RGB ecosystem?

bitmask/bitlight: Two very formal project parties. The former was announced on the LNP/BP homepage and focuses on the development of wallets and diba (nft market). The latter focuses on the development of wallets and dex;

pprgb: The first rgb meme with market popularity, a project temporarily released on liquid (note the attributive)

seal: Projects that hope to issue NFT and empower tokens on rgb insist on issuing on rgb

UTXO exchange: I want to build dex on rgb and use zero-roll airdrops. The assets it issues must be rgb assets. However, given the current form, it is speculated that it will be in a centralized form and assess the risks by itself.

BiHelix: Originally named infinity, it was later renamed intas, and later renamed Bihelix. I wrote a lot of articles and did a lot of evangelistic work, but in the early days there was some unpleasantness with the LNP/BP agreement and it was identified as a scam. I suggest They need to deal with this problem well, otherwise it will be more difficult to do it on this track

rgbdoge: It is speculated that it is a Chinese project (I don’t care whether it is Chinese or foreign, it depends on the quality and strategy of the project). It has strong action, but lacks direction (from the initial battle for “number one”, to building a platform, to going issued on liquid)

bitrgb: A platform for making RGB smart contracts. It is currently using the nostrasset method. I have recommended the zealy task (Lubai idea) before, but in view of the “anonymity of the team/anonymity of investment institutions/charge mint (the price seems not low)” ”, feeling that the risk is very high

Recently, it was discovered that LNP/BP tg was identified as scam by Dr. Maxim.

Inscriptionwar: This is completely free, so there is no need to participate.

Q12. The on-chain security of RGB can be understood, but how to understand the off-chain security?

Off-chain security depends on the project party or the client itself, so the association needs to establish unified standards for storage, etc., to ensure the security of assets, etc.

Q13. Where is RGB data stored?

The main data is stored on the off-chain client, and clients can share information and communicate through Storm nodes in the future.

Q14. Tell us about the relationship between sideswap and liquid?

Let me give a brief introduction. Adam Back founded the blockstream company. This company has many products, such as the elements side chain development platform. They also have green wallet products, real mining pools, and financial management products related to mining pools. Financial products, etc.;

Liquid is L2 developed using the elements platform, and sideswap is a project on Liquid.

Q15. RGB is stored off-chain, so is the security of off-chain data guaranteed by the project party? If there is a problem with the project side’s data, is it possible that there will be a problem with the assets? Is it possible that the project party is doing evil?

The storage security of off-chain data is provided by the project party. Users can protect the security of their assets by backing up data. Of course, if there is a problem with the project party’s data and the user does not back up the data himself, then there will be problems with the assets. .

Some malicious project parties may commit crimes by creating malware, but the usage mechanism of RGB can avoid mechanism fraud. Of course, RGB is difficult to prevent in all blockchains.

Q16. Through Storm nodes, can data be interconnected between different project parties and achieve data decentralization?

Yes, using the Storm protocol, data is shared between peers, but current development is overdue

Q17. Since the RGB protocol is private, the outside world cannot see personal transaction data. Can the project provide personal transaction, transfer and other information?

Can’t. The project party cannot collect information about individual transactions and may only collect number transfers completed within the application (such as aggregate statistics).

Of course, I personally think that if the user authorizes the relevant permissions, then the application can access this data (it will be somewhat similar to the unblinding key on Liquid to view the blinding information)

Q18. Is it possible that there will be a securities asset (AMP) similar to Liquid (which must be disclosed to the outside world), so that assets that must meet certain regulations must be disclosed to the outside world?

Yes, but every company needs to comply with regulations regarding securities.

Q19. How to prove that an asset is an RGB asset?

1) The asset has ContractID and genesis initial value

2) Compatible with RGB wallet

3) Open source

This way you can know whether it is an RGB asset

Q20. Since assets between different projects cannot interoperate, is it possible to have a common asset layer?

UTXO is the “public” asset layer, but only between the same assets, for example: USDT<>USDT; in the future, we can achieve “interoperability” between different assets, but this requires Bifrost

Q21. Can RGB be connected to different chains such as Liquid and other L2? What form does the asset take? Does it have to conform to the RGB asset specification?

This is possible, but the target chain must support the UTXO model and other available models in order to integrate with RGB Core and cross libraries. At this time, the assets need to follow the specifications of the RGB20 model.

Q22. If RGB is built on the Lightning Network, can it be considered like this: RGB data is recorded off-chain, payment data is confirmed through the Lightning Network, and Lightning Network data is uploaded to the Bitcoin main network through multiple modes for confirmation?

In fact, RGB is compatible with LN and you can use it with any LN implementation, such as inserting CLN or LND. When using Storm, acknowledgment of each sample is possible on the LN; on L1, the acknowledgment and routing of the asset is only done if you open/close the channel or scan using HTLC.

Q23. Due to the particularity of RGB asset transfer, which requires confirmation from both parties, is it difficult to build an amm mechanism similar to uniswap? Can this be achieved by letting users authorize certain permissions in advance?

Yes, this requires a lot of support libraries to work together,

In theory, the process can be simplified through authorization. Of course, this is only in theory.

Part 4: Reference links

1. RGB technology official website

Here, you can learn:

1️⃣What is RGB, what can it do, and what are its advantages (Jump）

2️⃣How to try the RGB library, such as command line, installing nodes, calling API, etc. (Jump）

3️⃣Learn RGB through official videos (of course, it is difficult for non-English speakers) (Jump）

RGB protocol

Scalable & confidential smart contracts for Bitcoin & Lightning

rgb.tech

2. RGB Blackpaper

This document explains the design principles and provides in-depth technical insights into how RGB systems are constructed and work, including:

1️⃣Overview and goals of protocol design (Jump）

2️⃣Introduction to “Client Verification”, describing “Single-use-seals”and”Deterministic bitcoin commitments”（Jump）

3️⃣Explanation of “RGB Contract, Status and Operation” (Jump）

4️⃣Some contents of “Try RGB Contract”: including writing contracts, interacting with contracts, P2P communication, interacting with wallets, etc. (Jump）

RGB Blackpaper | RGB Blackpaper

Turing-complete, Scalable & Confidential Smart Contract Layer for Bitcoin & LN

blackpaper.rgb.tech

3. Official FAQ document

If you encounter problems, you can first check whether this official document has any answers.

rgbfaq.com

rgbfaq.com

4. AluVM virtual machine (relatively hard-core, requires some basic knowledge)

Here, you can learn about the Turing-complete Alu virtual machine developed by the LNP/BP Association

About AluVM | AluVM

www.aluvm.org

5. High-quality RGB protocol analysis report

1️⃣CoinEx Research

A Brief Analysis of RGB: A Scalable, Confidential Smart Contract Protocol Built on Bitcoin

Blog | CoinEx - The Global Cryptocurrency Exchange

CoinEx - The Global Cryptocurrency Exchange. Supports BTC, LTC, ETH, XRP, Doge, Shib etc and more trading pairs. High-speed matc…

www.coinex.com

2️⃣Federico Tenga

Understanding the RGB protocol

@FedericoTenga">Federico Tenga – Medium

@FedericoTenga">Read writing from Federico Tenga on Medium. Working on Bitcoin stuff. Every day, Federico Tenga and thousands of other voices re…

@FedericoTenga">medium.com

3️⃣Bitfinex

How Can RGB Improve Bitcoin?

How Can RGB Improve Bitcoin? - Bitfinex blog

RGB is a smart contract layer and off-chain protocol built on the Bitcoin blockchain, which allows for the minting and issuing o…

blog.bitfinex.com

4️⃣Waterdrip Capital

Detailed explanation of RGB protocol: finding a new way to create a new second layer of Bitcoin asset issuance

foresightnews.pro

foresightnews.pro

5️⃣ Design of RGB protocol

Design of RGB protocol

A Chinese gathering place for Bitcoin ideas

www.btcstudy.org

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