Sidechains explained in simple English

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Blockchains are actually quite limited in their area. There are challenges of scalability and speed that make it difficult for some technology applications to work well.

Even so, the blockchain may be desirable to use for its immutability, security and transparency. But to be used, its challenges must be overcome. An emerging technology that is trying to make the blockchain more efficient and scalable is "sidechains".

This article will give a look at which sidechains are and will explain them, in plain English. But first, a quick reminder ..

A reminder of the "problem" of Bitcoin scalability

Bitcoin transactions are verified using a process called Proof-of-Work, while it is great for confirming transactions, it is a bit slow and cumbersome. By design, Bitcoin transactions take a little time to check, compared to our world of instant gratification, at least.

Since Bitcoin has grown in popularity, the slowness of its verification process has become the focal point of a controversial debate about how Bitcoin blockchain should be "scaled up" to increase its throughput. There are numerous solutions under development and sidechain is one of these.

So, what's a sidechain?

No, it was not the thing you had hanging on your jeans when you were 13.

As the name suggests, a sidechain is a type of blockchain that existsside its main chain. The main chain can be thought of as the parent chain and the sidechain as a sort of "chain of children".

However, sidechains should not be confused with hard forks. The two may look similar, but with a sidechain the original chain remains unaltered and can be reunited in the future. In some cases, sidechains can offer a specialized platform to perform a specific task or test beta versions of blockchain software, for example.

You might hear about things like the Lightning Network that works like another "layer" on top of the Bitcoin protocol, to offer a high-speed micro-payment network – in principle the sidechains work similarly.

Ok but why?

With all the work that parent chains have to undertake, the sidechains offer a place to download and give some of the work. Rolling with the parent-child analogy, the children's chain has sufficient resources to do some chores on the house, while the parent chain prepares dinner for the whole family. It can help make things a little more efficient.

Obviously, to make a sidechain work, you need digital resources or tokens. Usually these tokens / coins come from a user in the main chain. Resources moving between parent and sidechain are anchored anyway, which means that coins are transferred between the chains at a predetermined rate.

To get the coins on the sidechain the user will send the coins to the predetermined address connected to the sidechain. This address will remain on the coins, which prevents the user from spending it on the main chain or elsewhere for that matter.

Once the blocked funds of the main chain have been communicated through all the chains, they will be available on the sidechain. The user will then be able to collect his coins and start using them on the sidechain. When moving the cryptocurrency from the sidechain to the main chain, this process is actually reversed.

So you're there, the next time someone tells you about the sidechain project they're working on, you'll know what it is.

But if the sidechains hold or not the silver bullet for the problem of the scalability of the blockchain it's all about another matter.

Published December 11, 2018 at 13:42 UTC