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Sidechain Blockchain: Are You Taking Chances?

The blind side, as defined by American NFL terminology, is the side of the offensive line where a quarterback (QB) can expect a surprise hit since he cannot see the incoming onslaught. To protect the quarterback's back, the tackle, who is the strongest and most experienced player on the team, is assigned to him.

Let us now picture the game. The play is called by Mr. Sidechain, a quarterback. While the tackle, Mr. Blockchain, backs him up, he performs an excellent job. Mr. Sidechain is rather quick and efficient on his own; yet, without Mr. Blockchain, he is insufficiently secure and would struggle to reach his aim.

How Does It Work?

In layman's terms, a sidechain is a blockchain that is independent of the mainnet. It has numerous benefits, including fast speed, flexibility, and liquidity. You may use it for transactions and computations without a problem. You can even make your own tokens!

Your ‘daddy' chain, on the other hand, is required to authenticate and secure your actions. You must also ensure that assets are reliable and ready for the global market. Transferring digital assets from the original BTC blockchain to the side chain (or vice versa) is permitted because the relationship between the child and parent chains may be represented as a linkage.

In terms of technology, this is accomplished by sending some bitcoin tokens from the BTC blockchain to an output address. They are deemed locked there, and users cannot access or spend them. It is now up to the federations to take action.

A federation is a collection of powerful servers that act as a connection point between the mainnet and the side chain. One of the federation's most essential goals is to identify when bitcoin units should be secured and when they should be unlocked. The fact that sidechain producers can award membership in the federation to any user is an interesting feature.

Following the completion of the transaction, both users must offer confirmation, which is sent with a slight delay for further security. When the waiting period is over, the coins (or their comparable number) are released and made available on the child chain.

Today's Situation: Solutions

BTC blockchains were the original name for sidechains. You may now use the mainnets of Ethereum, NEO, NEM, and other cryptocurrencies while also having the option to construct a sidechain for these networks. The use of a sidechain is not limited to token transfer (as well as interaction and interchange). It also allows you to rebuild and add new features to already existing digital files. Yes, new blockchain apps will be possible to be developed on the sidechain. The most interesting sidechain-based projects launched in the recent few of years are listed here.


Blockstream's Liquid was the first commercially available Bitcoin sidechain. It allows for instant fund transfers across BTC exchange platforms, eliminating the need to wait for transactions to be confirmed by the Bitcoin network. Liquid Bitcoin is Liquid Network's own cryptocurrency (LBTC). It is tied to BTC at a 1:1 ratio.


Plasma serves as a platform for smart contract development. It enables the execution of a crypto contract with strong incentivization and enforcement. Smart contracts can, in fact, continue to run autonomously using network transaction fees owing to PLasma. At the same time, it allows blockchain to support tens of thousands of financial applications all around the world. In fact, this type of solution might be thought of as a substitute for centralised server farms.

Ginger RSK

Rootstock released this sidechain project with a cat's nickname (RSK). Ginger's network has a two-way peg with the Bitcoin blockchain and uses merged mining to reward BTC miners. Fast payments and smart-contract capabilities can be added to the BTC blockchain with RSK.


This is a business-oriented blockchain-as-a-service platform that uses the proof-of-stake consensus mechanism. Because the main chain only has a limited set of functionalities, the majority of its transactions are performed on the child chain level. The option to access bitcoins and other assets via a child chain is the most appealing feature for clients in this situation.


Yes, I'm sure you've heard about it. The multi-sidechain design of Ulord is well-known. So far, two side chains have been built under the platform, and there will most likely be more. Ulord will attach as many kid chains as feasible to its main net in order to meet various app circumstances.


This sidechain improves Bitcoin anonymity while sending funds. For example, if you use the Zerocash protocol to get your BTC to the sidechain (in order to transmit it to an anonymous recipient), this transaction will not be logged in the transaction history. Nobody can monitor it, and it won't jeopardise Bitcoin's security.

Resolution for the Future

Most analysts believe that not just Bitcoin but also Ethereum's sidechain will have a bright future. There is no doubt about it, given the extreme popularity of cryptocurrencies. Fortunately, sidechain technology eliminates the majority of the issues that current blockchains have or may have in the near future. Some of the more troubling difficulties, as well as solutions, are listed here.

Problem #1 scalability.

The issue of block scalability and a limited amount of transactions is no longer a concern. Improvements in scalability and the evolution of the blockchain protocol are irreversible since a coin can be transferred from one generation chain to the next. Furthermore, they have the ability to store massive amounts of data.

Problem #2: Development and Flexibility

There have been numerous blockchain applications that have failed. We can use sidechain technology to test new software in a real-world setting or improve old systems. Even if testing apps are unreliable or susceptible, they will have no effect on the mainnet. The entire damage will be contained within the kid chain.

Problem #3 Timeline

You're intended to forget about transactions that take a long time on the sidechain. They will be processed faster, despite the federation layer and confirmation delay, because using blocks on the sidechain takes less time than building new ones on the blockchain.

Problem #4 Costs

With sidechain logic, huge transaction fees on the mainnet can be drastically lowered. Instead of recording every move, the parent blockchain can be used to parse and complete a large number of them.

Greg Maxwell, Bitcoin core developer and Co-Founder and CTO of Blockstream, stated that sidechains can also tackle the inflation problem in a recent speech:

Have you ever attempted to count the number of coins and initial coin offerings (ICOs) that exist today? Because the majority of blockchain assets are backed by BTC, there will be fewer Bitcoins month after month.

Sidechains, according to Greg, will be able to provide some form of inflationary ratio, allowing users to decide whether or not to interact with particular tokens.

A sidechain, according to Stanislav Sheliakin, who has worked as a business analyst for Big Four organisations and Cryptoauxiliary, can also be a good fit for corporate alliances and consortiums. Unlike mainnet blockchains, which do not require large investments and do not follow "know your customer" methods, sidechain ventures can save a lot of time and money (no extra blocks, no transaction fees). They also provide workflow transparency and maintain a discreet relationship between companies.

The Benefits and Drawbacks of Using a Sidechain


Permanence. It's one of its most appealing features. Why? Because you don't have to start a new sidechain every time you do something outside the mainnet.

Interaction. The ability to employ a specific cryptocurrency from one blockchain into another is enabled through asset interaction. Due to the flexibility of blockchain technology, the hybrid system encompasses not only on-chain and off-chain environments, but also collaborative (hybrid) development.

Development. Sidechains provide as a platform for developing additional features and upgrades for blockchain applications (read more: How to Develop a Customized Blockchain Decentralized Application). You can risklessly release beta versions of new coins or test other solutions.


Vulnerability. Because sidechains are commercial ventures, they are likely to attract a large number of hackers. A 51 percent attack (where a user or other single entity gains more than half of the hash-power and takes control of the chain, e.g., in a POW-based system) can go live with a well-thought-out scheme. Even if that happens, the original blockchain will remain unaffected due to its logic and structure.

Miners. They aren't exactly horrible guys. When developers bring a younger BTC blockchain brother to life, or any other PoW consensus-based model, they must hire block-builders and pay them to check and ensure sidechain safety. Transactions could become more expensive than they are now as a result of this.

Federation is considered a sidechain advantage, according to It's amusing, but it might also be considered a disadvantage.

As you know, federation isn't a terrible thing in and of itself. It determines the state of spent currencies and is one of the major conditions for sidechain functionality. It basically acts as a second layer of security. Any additional layer created through federation, on the other hand, could be viewed as a weak point by hackers waiting to strike.


Sidechains have the potential to greatly expand the capabilities of blockchain platforms. They can be referred to as the avengers who will defend the blockchain universe from extinction. This technology is one of the most popular in the cryptocurrency world due to its capacity to enable faster transactions, develop blockchain apps further, and exchange coins in simpler ways.

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