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Hype in the blockchain and DeFi space has reached new, overwhelming heights. It can be difficult to differentiate between fact and fiction, but when you do find a project providing innovative technical solutions, it’s a breath of fresh air–especially when their primary focus is on development and not creating vacuous buzz.

Led by financial technology veteran CEO Nicholas Gregory, Cryptographer CTO Dr Tom Trevetham, and Security Technical Architect Paulius Stakauskas in central London, CommerceBlock is comprised of an extremely talented team, sought after for their insights in solving the hard problems in the Bitcoin and blockchain ecosystem.

Depending on who you ask, CommerceBlock is either entirely unknown or at the very cutting edge of the space. However, when it comes to the development of sidechains, only products developed and deployed by Blockstream and CommerceBlock have any significant real-world usage. DGLD, led by MKS Pamp, CoinShares and Blockchain.com, stores over $25 million dollars of gold on CommerceBlock’s Ocean blockchain, secured by their MainStay attestation service and GuardNodes network.

CommerceBlock’s MainStay attestation service answers one of the common questions about Bitcoin often posed by the gold-bug community: what is the “industrial usage” of Bitcoin that backstops its value? The MainStay service is a direct answer to that question, as it allows enterprise customers to anchor their sensitive data to the world’s most secure decentralized database in an entirely private and scalable manner with user-friendly Google Drive, Dropbox and Microsoft OneDrive integrations. Bitcoin is more than money in this context, it is also an immutable anchor for the world’s data.

Unfortunately, CommerceBlock has admitted that their Ocean blockchain tokenization protocol has struggled against the technically inferior solutions on Ethereum, HyperLedger and EOS.

We don’t have EOS’s $4 billion dollar warchest, IBM’s brand name or Ethereum’s massive hype machine. We’ve been BetaMax’d. But we’re not going to let that stop us–instead of fighting a losing battle, we’ve decided to move up the stack. – NG

CommerceBlock’s new focus is on Mercury, a blockchain-agnostic layer 3 protocol based on the Statechains concept proposed by Ruben Somsen in 2019. The initial proposal of Statechains requires a consensus change to the Bitcoin protocol and is thus not immediately deployable in the Bitcoin network. After some research, the CommerceBlock team proposed an innovative cryptographic alternative to sidestep this roadblock, and has put this solution to the test in their open source implementation of this protocol, Mercury.

When it comes to improving the scalability and privacy of public blockchains, many questions remain unanswered. In the custodial context, there are many solutions to these problems, but they don’t extend the properties of public blockchains that we have come to demand. Sometimes described as a meta-layer solution, Statechains introduces a novel non-custodial middle ground that retains the important security features of public blockchains but also introduces new avenues for scalability and privacy.

At heart, a Statechain is a mechanism for transferring a private key between two parties, be it a key associated with Bitcoin, Ethereum, Libra etc. Transferring this key in a secure, privacy preserving way is the main focus of CommerceBlock’s Mercury. While most scaling solutions abstract away the base concept of private key management to higher layers, if CommerceBlock can package a private key into a blockchain-agnostic object that can be passed around, this new asset class will open up significant opportunities that minimize security and regulatory risks for the entire blockchain community.

One such opportunity exists in the advancement of privacy tools. CommerceBlock has an exciting revenue-generating service that will be paired with the launch of Mercury that combines the scalability of Statechains with the privacy of Greg Maxwell’s CoinSwap protocol. As fees on public blockchains increase, CoinJoins become cumbersome and expensive. While powerful in nature, CoinJoins have significant user experience complexity with long wait-times during coordination, potentially high fees and a number of DoS attacks which can further delay mixes.

CoinSwap in the Statechain context provides a compelling alternative to CoinJoin, because it has a smaller on-chain footprint, can provide faster mixes and it has more robust anti-DoS mechanisms. Given the natural complexities of providing privacy tools on public blockchains, Mercury will be a welcome player in the space.

To keep up with development of Mercury, you can follow CommerceBlock on Github.