Instachain (a portmanteau of instant + sidechain) is a decentralized, real-time 2nd layer sidechain with instant transaction confirmations and near 0 fees, with a 2-way peg so you can deposit and withdraw btc directly to and from the btc network. It features a decentralized, non-distributed architecture that enables anyone to run a node (a.k.a their own sidechain) and process transactions. Node operators do not need any permission to run a node, and users can connect to any (1 or more) node they choose to.
- Support micropayments, merchant, and p2p payments by offering instantly confirmed transactions that settle on bitcoin.
- Develop an open protocol that exchanges, payment processors, banks, neo-banks, and legacy or cypto fintech companies can easily implement to increase bitcon adoptation and free market competition
- Scale bitcoin to billions of users by a decentralized, horizontally scalable layer 2 solution.
- Make bitcoin easier to use by offering a familiar account based ledger paired with pseudonomous public key based transactions/messaging.
- Prevent proprietary software/networks from offering bitcoin payment processing services.
- Get rid of centralized platforms that don't allow withdrawing btc (robinhood, cash app, venmo).
Here is a simple tutorial that shows depositing, withdrawing, and transfering using the InstaChain layer2 ledger:
First, clone the repo and navigate to the /Wallet folder. This folder contains all the files need to interact with the network.
The wallet itself is a python file, so you will need to first install the depencies located in the requirements.txt file. You can install it globally or create a virtual environment; I prefer the virtual env because it is cleaner.
One the dependencies are installed, run the wallet-cli.py file. It should output something like this:
PS C:\InstaChain\InstaChain\Wallet> python .\wallet-cli.py
InstaChain Wallet v0.1a - CLI
Warning: config.json not found
You can ignore the "Warning: config.json not found", the config file is for things like automatically loading a wallet at startup or setting a default node url.
Now, create a new wallet. Notice, when it prompts it says "(no wallet loaded)" which means you need to either create or load a wallet
(no wallet loaded) > new-wallet wallet.json
4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
This creates a new wallet called "wallet.json" and automatically generates an address, which is then printed.
When an address is created, the wallet generate a public key and private key pair. The "address" is the public key that is the source and destination address of a transaction. The private key is needed for signing transactions that spend the funds in that address. If you look at the wallet.json file, you'll see the pubkey/privkey pair.
{
"addresses": [
{
"pubkey": "4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK",
"privkey": "4ayhEYjibFcAuXXXXXXXXXXXXXXXXXXXXXXX",
"description": "",
"deposit_address": ""
}
],
"wallet_name": "wallet.json",
"trusted_nodes": [
{
"hostname": "https://testnet.instachain.io/",
"node_id": "BbwLnyLR9eVjL2qb",
"name": "Tesnet Node",
"asset_id": 4294967297
}
],
"current_node": "https://testnet.instachain.io/"
}
You'll notice that the private key is censored out, this is because this key controls access to the funds in that address. If you lose this key, you will lose access to the funds. So keep this safe and do not disclose it to anyone else.
You can create as many addresses as you want by using the new-address command.
(wallet.json)(node: https://testnet.instachain.io/) > new-address
3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
This also prints the newly generated address. Note that once a wallet is loaded, it will print the wallet name and node it is connected to before the prompt.
You can see all the addreses in the wallet using the list-addresses command
(wallet.json)(node: https://testnet.instachain.io/) > list-addresses
4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
Now that we have an address, we need to deposit funds to it. There are 2 ways to receive funds: either you receive funds from some other layer 2 address via a transfer transaction, or you can deposit (a.k.a peg-in) funds to it. To deposit funds, you will first need to get a deposit address. This is a layer 1 address that credits you layer2 address with funds when it receives layer 1 transactions.
(wallet.json)(node: https://testnet.instachain.io/) > get-deposit-address 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
mrBXA86UumhJc4aQTYs5NQeWgaqrEzzaKX
This command will print the layer 1 address you will need to send funds to. In this case, the address is a testnet bitcoin address. Note that this node is live and you can see the address here: https://blockstream.info/testnet/address/mrBXA86UumhJc4aQTYs5NQeWgaqrEzzaKX
Once you transfer layer 1 funds, you will see your layer 2 address credited after 3 confirmations (6 confirmations for mainnet bitcoin, 3 for testnet bitcoin)
You can display you wallet balance using the list-wallet-balance command:
(wallet.json)(node: https://testnet.instachain.io/) > list-wallet-balance
4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK: 100000
3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K: 0
Now let's transfer some of the funds from the first address to the second using the transfer command:
(wallet.json)(node: https://testnet.instachain.io/) > transfer 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K 1500 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
Transaction id: FFcNPSH2tS3tj1m1KzHsP9FEVxyZ3egj
Asset id: 0x100000001
{"error_code":0,"error_message":"Success"}
This will print the error code as well as the transaction id. You can use the transaction id to get the full transaction details using the view-transaction command:
(wallet.json)(node: https://testnet.instachain.io/) > view-transaction FFcNPSH2tS3tj1m1KzHsP9FEVxyZ3egj
{"error_code":0,"error_message":"Success","transaction":{"amount":1500,"destination_address_pubkey":"613vArFUGhg5MnXdWc5bZg6eiuH2qFAPCgRkvRorFYuEN8TSoFrp2fioC8QMEpFdYT2M4PfPJm5eoUv24pJa3vUY","fee":1,"layer1_transaction_id":null,"layer2_withdrawal_id":null,"signature":"4FgTXQTyQnNKPzU4UzMvrjwsRZfjfHRuoTwAB6K6a6N8nJbRSJFN4fKvQWenzpE5RCYj43PPYtqBsc3aiYFWqcNy","signature_date":null,"source_address_pubkey":"4bhk6kJMRbQR2m62onWdTTZvE74bYcP9huFW2JtNN47nYJX4UdZaZGG6R7x11S7QoL5K62hGB6bwgkA2u1Bfs9EU","timestamp":1645347924,"transaction_id":"kHxA9Cmz5Qqg256vSXT3B3C4LJxeMFat","transaction_type":1}}
Notice the amount, destination_address_pubkey, and source_address_pubkey fields which basically show what the to/from address and amount is. For the rest of the fields, see the design docs.
Once you have funds in a layer 2 address, you can always withdraw to the base layer using the withdraw command. There are no fees for withdrawing, but since this involves a layer 1 transaction, the base layer might charge standard transaction fees which the recipient pays.
(wallet.json)(node: https://testnet.instachain.io/) > withdraw 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK tb1qe6gqflmgn8p2ppunscqd8khd524kvwh8j4slqa 22000
Transaction id: TOMa9040af33GtSD7JuMNq18sbkI77YO
{"error_code":0,"error_message":"Success"}
You can see all transactions in your wallet using the list-wallet-transactions command
(wallet.json)(node: https://testnet.instachain.io/) > list-wallet-transactions
Address: 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
Transaction ID Source Amount Destination
FFcNPSH2tS3tj1m1KzHsP9FEVxyZ3egj 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK -1500 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
TOMa9040af33GtSD7JuMNq18sbkI77YO 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK -22000 tb1qe6gqflmgn8p2ppunscqd8khd524kvwh8j4slqa (WITHDRAWAL)
fqbWVTWlGxVpzPFf DEPOSIT +100000 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
Address: 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
Transaction ID Source Amount Destination
FFcNPSH2tS3tj1m1KzHsP9FEVxyZ3egj 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK +1500 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
You can see that it prints a table for every address in your wallet. If the transaction is a deposit, the source address will print DEPOSIT since this is basically a transfer from layer 1 to layer 2. If it is a withdrawal, the destination will be the layer 1 address you deposit to with a "(WITHDRAWAL)" appended to let you know it is a withdrawal. The amount will be a positive or negative integer depending on if funds are moved into or out of your address.
You can also print the transactions for only a specific address:
(wallet.json)(node: https://testnet.instachain.io/) > list-address-transactions 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
Address: 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
Transaction ID Source Amount Destination
FFcNPSH2tS3tj1m1KzHsP9FEVxyZ3egj 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK -1500 3k4wgpDz4o4bmTxEhRis9AYWBniPAyozrWkgmn9z8Xsryk8XHUukC9MyKhRU9jY4oZA8sgQyJq15UDDe4V8rUS5K
TOMa9040af33GtSD7JuMNq18sbkI77YO 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK -22000 tb1qe6gqflmgn8p2ppunscqd8khd524kvwh8j4slqa (WITHDRAWAL)
fqbWVTWlGxVpzPFf DEPOSIT +100000 4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK
You can see the deposits and withdrawals using the view-transaction too. Here is the deposit transactions:
(wallet.json)(node: https://testnet.instachain.io/) > view-transaction fqbWVTWlGxVpzPFf
{"error_code":0,"error_message":"Success","transaction":{"amount":100000,"destination_address_pubkey":"4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK","fee":0,"layer1_transaction_id":"3048a01fad80083fa360ef441813b5694f4538b586c74993d86feafc55be1d07","layer2_withdrawal_id":null,"signature":"5jbvLfinbD7BCnSWqnTxpXrRA189k4GTRwNyCdiUQZ3gokqhTd2yKjigXcDKZjgKnJ48P4J11n1GSBiZVuG9jT4S","signature_date":null,"source_address_pubkey":"3GN8xLpdxySRXHkoafjg5nkYTQZ11USKjRfe2uKR7XFJuK3RayANJdA6f5G96xK9HjKMUpnHxUaTpypQiWUeRPSr","timestamp":1647843298,"transaction_id":"fqbWVTWlGxVpzPFf","transaction_type":2}}
The layer1_transaction_id field will contain the layer1 transaction id that does the deposit or withdrawal; in this case the deposit transaction is this one: https://blockstream.info/testnet/tx/3048a01fad80083fa360ef441813b5694f4538b586c74993d86feafc55be1d07
Likewise, you can see the withdrawal transaction:
(wallet.json)(node: https://testnet.instachain.io/) > view-transaction TOMa9040af33GtSD7JuMNq18sbkI77YO
{"error_code":0,"error_message":"Success","transaction":{"amount":22000,"destination_address_pubkey":"tb1qe6gqflmgn8p2ppunscqd8khd524kvwh8j4slqa","fee":0,"layer1_transaction_id":"4b341ca7c146ae19addc9f57492e3ad9b6fcc9f1ece562a0e17f6a8bdcb9b98c","layer2_withdrawal_id":"UfWEgyJaCOKCJb1C","signature":"4VvB75wMvAWU3u4kueDahrB4HzfUe4VPDEEqRuKKDa3GY6gPDqpVdm9zpBhi6zdMKM6bWSxwhrg3WVEhfgkurQdD","signature_date":null,"source_address_pubkey":"4BS6izr4fukPKa91auxCgkn4nPvWLqMLoHBGdySpuds5SvFwU9686cXp81zfF5GaLcDcKFp5WHKLzETumafD1USK","timestamp":1647844204,"transaction_id":"TOMa9040af33GtSD7JuMNq18sbkI77YO","transaction_type":3}}
Here is the withdrawal transaction: https://blockstream.info/testnet/tx/4b341ca7c146ae19addc9f57492e3ad9b6fcc9f1ece562a0e17f6a8bdcb9b98c
Note that both the deposit and withdraw transaction only update the layer1_transaction_id once the layer1 transaction gets 3 confirmations. Therefore, right after you send the withdraw, the layer1_transaction_id will be null untill the transaction gets confirmed.
You can use the close-wallet command to save the wallet (write the wallet to the disk) and close it, though it automatically saves after important commands, like generating a new address.
(wallet.json)(node: https://testnet.instachain.io/) > close-wallet
wallet.json saved
Lastly, you can use the exit command to save the wallet and exit the program. Then run wallet-cli and open-wallet to load the wallet again.
(wallet.json)(node: https://testnet.instachain.io/) > exit
wallet.json saved
PS C:\InstaChain\InstaChain\Wallet> python .\wallet-cli.py
InstaChain Wallet v0.1a - CLI
Warning: config.json not found
(no wallet loaded) > open-wallet wallet.json
current_node: https://testnet.instachain.io/
(wallet.json)(node: https://testnet.instachain.io/) >
And that's all for this tutorial!