3.4. Bitcoin anchoring

Sequentia blocks are anchored to Bitcoin blocks for security and interoperability reasons; therefore, to run fully trustlessly, Sequentia nodes must be connected to a self-hosted Bitcoin full node.

Each Sequentia block is anchored to a Bitcoin block for the sake of interoperability of smart contracts (e.g., hashed timelock contracts, also known as HTLC):

Any new Sequentia block includes a reference to the hash of a Bitcoin block. If Sequentia block X references Bitcoin block Y, the block X+1 necessarily references the hash of a Bitcoin block at a height equal or greater to Y. When a Bitcoin chain reorganization happens, Sequentia nodes discard all Sequentia blocks referencing the hashes of orphaned Bitcoin blocks.

Several Sequentia blocks can be built referencing the same Bitcoin blockhash, since the frequency of Sequentia block generation is higher than Bitcoin’s.

Anchoring enables faster and more reliable cross-chain operations between the Bitcoin and Sequentia blockchains. Any operation involving two different chains, like an atomic swap, today requires waiting for long confirmation times (several blocks on both blockchains involved) to ensure that the operation will not be reverted in one of the two chains. Thanks to anchoring, if Bitcoin reorganizes or orphans one or more blocks, Sequentia also reorganizes all blocks referencing the Bitcoin blocks discarded by the network. Therefore, if a cross-chain operation involving Sequentia is removed from Bitcoin’s block history (e.g., an atomic swap), the corresponding operation on Sequentia is also removed from Sequentia's block history.

It is important to note that anchoring does not allow for more reliable cross-chain transactions without other assumptions detailed in the following sections: persistence §3.5, consistency §3.7. The anchoring mechanism is also utilized for purposes relating to the properties of liveness and security of the blockchain (escaping stall §3.8, checkpoints §3.11).