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Blockchain investment: The Lumino project by RIF labs; will Bitcoin be the Ethereum killer?

blockchain investment

The Lumino project is the world’s first network to bring smart contract capabilities to Bitcoin blockchain and the project went live last week (source). A monumental developmental towards achieving a decentralized global peer-to-peer payments network which was what Bitcoin intended to be during its inception. But failed to achieve due to scalability and transactional speed issues.

The company behind Lumino project-RIF labs provides a scaling solution to Bitcoin achieving as many as 5000 transactions per second. Lumino project is a part of RIF labs Bitcoin infrastructure solution dubbed RSK infrastructure and originally belonged to RSK labs.

RIF labs had acquired RSK back in 2018 for an undisclosed amount, according to InWara’s M&A database. Interestingly, RIF labs is a spin-off project established by RSK founders to allow RSK protocol to interoperate with numerous other smart contract platforms.

RSK labs is the company behind the project named “Rootstock” which is an open source smart contracts network for Bitcoin blockchain. RSK labs have raised a cool $4.85 million in venture funding from industry heavyweights such as Digital Currency Group, Bitmain and Bitfury group among others, according to InWara’s Venture funding database.

The company announced in 2018 that its sidechain names Rootstock which added smart contracts capabilities and on-chain scaling augmentation to Bitcoin network. But could only process about a 100 tps which RSK labs realized early on wasn’t enough to facilitate mass adoption. Thus the Lumino project.

Interestingly, blockchain startups building infrastructure, platforms and protocols attracted the bulk on venture funding received by startups in this space.


Venture funding in Blockchain Startups by Industry Sector

blockchain investment



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Industry sectors such as Financial Services, Social media and Fintech are leveraging blockchain technology to provide business solutions, in most cases, they’re merely adopting the technology. But the Blockchain industry sector is where startups are leading advancements in blockchain technology itself by developing new infrastructure, protocols, platforms etc. 

A total of $29.9 billion was invested in startups leveraging blockchain and advancing blockchain. A staggering amount when considering the nascent of the technology. Interestingly, startups advancing blockchain technology attracted as much as 24% of the 29.9 billion Venture funding received which is akin to a whopping $7.14 billion. On the heels of startups advancing blockchain technology are startups who are leveraging blockchain to provide business solutions. Financial services industry sector being the most popular attracting a cool $4.48 billion.

But I digressed, coming back to our topic about Lumino project. It is, in essence, an extra layer on Bitcoin’s network or a sidechain.


Sidechains explained

Sidechains are developing DLT mechanisms that hold great potential.


Because a sidechain enables digital assets or tokens from a blockchain, in our case Bitcoin, to be securely used in another blockchain, our case- Lumino, Rootstock, lightning network.

A simple analogy would be imagining Bitcoin network or any other blockchain to be a highway with cars driving on it and sidechains are parallel roads built next to the highway.

A sidechain is a separate blockchain that is connected or attached to its parent blockchain using a type of mechanism known as a two-way peg. And this mechanism is what enables interchangeability of assets between a parent blockchain and its sidechain or sometimes even called a child chain.


But why does Bitcoin even need a sidechain?

All three iterations of Bitcoin sidechain- RSK network, Lightning network and Lumino are all designed to solve one critical issue with Bitcoin blockchain network. Scalability!

At present Bitcoin is only able to process a maximum of 7 transactions per second. A comical number, when compared to 24000 tps Visa is able to process.

Why compare it with VIsa?

Because that’s whom Bitcoin is up against if it wants to become a global peer-to-peer payments platform. 

Lighting network adds another layer to Bitcoin’s blockchain thus enabling users to create a payments channel on that new layer.

What’s the advantage here?

This channel can be kept open indefinitely or as long as it’s required by the participants. On top of this, transactions will be almost instant with minimal to no fees.

In theory, Lumino is similar to Bitcoin’s lightning network in that it allows participants to make transactions off-chain but is better because it can accommodate tokens already running on RSK network developed by Rootstock.

Final thoughts

So why do i think Bitcoin could surpass Ethereum? Because currently Ethereum is so popular because the ease wth which decentralized applications can be built. Most ICOs, STOs and the latest IEO’s use Ethereum for their projects, mostly because it’s open source and ensures interoperability between dApps on its platform.

Due to these benefits, many people believe ETH will take over BTC as the most dominant cryptocurrency, widely known as the “Flippenning” event. Although Ethereum came close a few times like in 2017 when BTC market share was 38% and ETH 32%. But as of writing this article, Bitcoin maintains 57% dominance over the crypto market, the flippenning has never happened.

Bitcoin, on the other hand, has dominance over the crypto space and that too by a huge margin and is the most traded cryptocurrency on the market. But where it lacked was smart contract functionality and power to scale which is why people flocked to Ethereum. With Bitcoin network now also offering that capability, it’s not far fetched to imagine a future where BTC gains even more dominance over other crypto’s.


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