David Zimbeck says that BitHalo Contracts are Smart without the Block Chain Bloat

1. David Zimbeck says that BitHalo Contracts are Smart without the Block Chain Bloat Bitcoin transactions have been called a “trustless” process, in that the nature of the network removes the need for a middleman to act as a central point of trust between the two exchanging parties. Yet outside of pure peer-to-peer transactions, bitcoin usage requires a great deal of trust in platforms and services that are vulnerable to intrusion, sabotage and failure. The solution, many agree, is the use of decentralized platforms that mitigate or eliminate points of failure that can cause crippling losses for users and dampen perception of what is still an emerging technology. Next-generation platforms built using digital currency technology concepts are in development, yet several months ago, the first decentralized two- party smart contract quietly entered public beta and has been pushing the boundaries of its original design. BitHalo allows two parties to engage in a broad variety of smart contracts without having to pay any fees or overhead costs. In terms of usage, it can be utilized by two companies that want to establish a business contract over a predetermined period or by individuals who want to trade bitcoin or blackcoin, the digital currencies currently supported by the platform. CoinDesk spoke with developer David Zimbeck, who said that the open-source BitHalo works around several problems that keep smart contracts from being built on top of the bitcoin block chain. The drive to solve these issues has lead to the creation of smart contract platforms like Counterparty and ClearingHouse, as well as the next-generation block chain project Ethereum. The solution, David Zimbeck explained, is maintaining the integrity of the block chain by avoiding bloat, or excess information that can prove problematic for the network and results in a situation where network users have to download and constantly update a massive amount of data.

2. “Bitcoin actually has a limit on the number of transactions it can send [per block]. The reason for that limit is that they don’t want to send more than you can use on your bandwidth.” David Zimbeck BitHalo avoids this through a peer-to-peer client that connects users directly, using bitcoin and blackcoin has means for value exchange and encrypted email as a means of distributing contract data. Among the potential applications include joint banking accounts, sales escrow, employee contracting and payroll and anonymous transactions. Simple approach to secure wallets BitHalo and its sister-client, BlackHalo, allow for the creation of secure multisig wallets that then form the basis for the platform’s extensive smart contract applications. CoinDesk demoed the platform, which can be used to create individual, joint or group wallets. Once created, the wallets can be used to conduct multi-signature transactions, escrow or other forms of programmed exchange made possible by BitHalo. This type of functionality can also be seen in services like Armory’s Lockbox multi-signature wallet. With BitHalo, the activation of two private keys is required for any transaction to be allowed and broadcast by the party or parties in control of the wallet. David Zimbeck says that this lets a wallet owner; for example, keep one of the private keys on a secure offline flash drive, enabling a significant degree of security for the user.