Sidechain - Will be the one that sounds high in 2020 Blockchain Globe
Blockchain has becomes a game player for all tech industries , as it cultivates the reasons for improvement in all industries scope and visibility. This trending technology too , faces some issues over the past years . To overcome all issues of blockchain , there emerges a new concept called sidechain, the extentsion of blockchain .
Sidechains are prevailing over years in crypto world , but it first blasted out in 2014 when many authors wrote about an academic paper introducing Pegged Sidechains.
Being a blockchain development company, we intended to explore the blockchain use cases for everyone. If you really want to go through the basic things of blockchain technology just look at our blog : What is Blockchain Technology ? How it works? , to get know about Blockchain technology . Here let us share something new, about sidechains and how it helps blockchain to work better .
Major Issues in Blockchain Technology
Before knowing about the sidechains , let us first list out the major issues that exsits in blockchain .
1 . Scalability
The ability of the system to handle the growing amount of work by changing its size is known as scalability . Blockchain finds it difficult to withstand its scalability as there is a huge amount of applications of blockchains day-by-day .
2 . Interoperability
Interoperability refers to the ability of a computer software / system to operate, exchange and uses the information instantly . Blockchain suffers from interoperability issues over the years .
3 . Liquidity
The term liquidity refers to the volume of activities performed by a product / brand in the market . Liquidity of blockchain strikes to the bottom in recent days .
The chain fork , code fork and sidechains be the solutions for blockchain issues . But sidechain proves to the best solution out of all mentioned solutions .
Sidechain - A Greater Solution for Blockchain
All the above mentioned issues of blockchain are overcomed by this concept called sidechains . Thus , sidechains are considered to the best solutions for all the difficulties of blockchain .The main goal of this new concept of sidechain is to validate the transaction without affecting the whole system or network.
Sidechain is nothing but a separate chain as like blockchain , connected to the main blockchain via two-way-peg . Sidechains are considered as sub-chains or child chains and the first build blockchain are considered as main chain or parent chain .
Benefits of Sidechains
Connecting a sidechain with a blockchain to overcome the scalability and interoperability issues provides a lot more benefits .
1 . Helps us overcome the blocking of scale .,ie., limitig the number of transcations on blockchain .
2 . Provides flexibity of using the blockchain .
3 . Increases the speed of transcations by limiting the time .
4 . Proves to be cost-effective .
How to connect sidechain with main chain ?
The sidechains are connected with a main chain with the help of two-way peg , which is decentralized method and it uses SPV or Simple Payment Verification process.
Two-way peg allows the transcation of crytocurrency from main chain to sidechains and also from sidechains to main chain . This concept of sidechains are build in such a way that it supports any knid of cryptocurrency transcations.
How does sidechains works ?
The assets/ cryptocurrency are not directly transferred but follows some steps.The transactions of coins or assets to sidechain works as follows . Let us assume the transaction of asset is from main chain to one of the sidechains.
1 . First , the assets/coins are transfered to an address and locked there for some period of time.
2 . When it is locked under a special address it is assigned as "unspendable" tag which shows that it is the assets that is not spended and available for transacting .
3 . Then, SPV confirms the transcation of the assets .
4 . After the verification process , the assets gets transferred to the sidechain with a small delay in time .
The above process is same for tranferring a asset from any sidechains to the main chain . This transaction process is a decentralized way . It can also be made centralized process with the Federation sidechain system .
Federation/centralized sidechain system
The transaction process will takesplace as same as in the case of decentralized sidechain system but with the difference that SPV in decentralized is replaced by a group of trusted individuals or federation in centralized system .
The assets locking in a special address and transaction verification are monitored by federation in this kind of sidechain system.
Properties of Sidechains
The main properties of two-way -pegged sidechains are as follows :
1 . The assets that are transferred to sidechains can be moved back to the main chain .
2 . It allows transactions without any counterparty risks .
3 . The important property of sidechains is , they are independent . ie., the hacks or affects on any sidechain will not have reflections on other sidechains or main chain and vice versa .
4 . The transactions on particular sidechain are untrackable by the users who dosen't use/belongs that sidechain .
Recent Usecases of Sidechain
The notable sidechain implementations on recent years are listed below :
1 . Rootstock has created an open source testnet called Ginger for its sidechains .
2 . Ardor’s Blockchain which uses POS mechanism implements its childchains for global transactions of assets .
Future of Blockchain with Sidechains
Blockchain with its new dimension called sidechains can surely make for better future . Developments in sidechains will go a long way in bringing better liquidity, interoperability, and scalability of the blockchain and cryptocurrency globe.
Sidechains will sound louder within few days and by 2020 , there will be no blockchain present without its sidechains .
Let us hope for a good revolutionary changes by " Sidechains- The back-end Player of Blockchain Technology . "