What Are Sidechains?

By  //  January 17, 2022

Considering the rapid pace at which this digital age is evolving, it is high time when new concepts can be introduced and firmly established. The same goes for an aerodynamic concept known as Sidechains that paves the way for a set of different blockchains to communicate with each other. Moreover, sidechains can either involve multiple blockchains or it may also be an independent one. 

To put it in simple terms, a sidechain is essentially a side blockchain that can be linked to another blockchain. It inherently promotes the decentralized network through various blockchain networks and each blockchain has its respective set of protocols. Furthermore, they also have set separate purposes and functionalities that are dissimilar to each other and still form an integrated ecosystem. This is what the sidechain is all about. 

Emergence and Relevance 

There are multiple scenarios under which sidechains operate and the concept is being recognized by various industry leaders across different segments. Sidechain may either be perceived as a parent chain or as a child (dependent) chain. In a case where the relationship between the sidechain is identified as that of a parent-child, there are not many assets generated by the child chain. 

Moreover, the predominant asset is essentially derived from the original or parent chain. This profound mechanism provides a seamless cryptographic platform that enables an unabated movement of digital assets and other tokens. The movement is generated through the main chain and flows back and forth throughout this cryptographic mechanism. 

Example that simplifies the process

One of the predominant examples of sidechains includes Liquid Network which is being widely acknowledged in the cryptocurrency scenario. It facilitates the trading platforms as well as the traders to leverage a considerably faster network. Furthermore, the nature of transactions remains highly impenetrable and the parties involved enjoy their long-due privacy. 

The prospects of the creation of digital assets become significantly stronger in this liquid network. Now, Bitcoin is the epicenter of this network which is considered the main chain and ensures the uninterrupted flow of activities throughout. So the bottom line is that no activity can be initiated without the involvement of Bitcoin under a liquid network. 

How does it work?

The entire apparatus of the sidechain is quite unsophisticated and flows quite smoothly. Digital assets or coins are sent by the user of the main chain and these are eventually received by an output address. Now, these assets get locked and cannot be spent on any other platform. A confirmation is circulated in the entire chain right after the transaction gets completed. This calls for a waiting period as a form of additional security. 

These assets and coins will later be successfully transferred on the designated sidechain which provides an opportunity to the users to further move them on a new network altogether. However, the user is just required to reverse the entire process if he changes his mind and wishes to retract the coins to the main chain. 

An enclosed network 

Consider a scenario where you wish to move a bitcoin to a sidechain. This particular Bitcoin will be taken from the Bitcoin network and will be received on the sidechain so this requires some specific steps to be completed. In a bit to complete the process, a one-bitcoin transaction must be submitted to the designated lockbox address.

When a lockbox has a bitcoin, it means that the particular bitcoin has been detached from the circulation of all other bitcoins. If you are interested in bitcoin trading, visit british-bitcoinprofit.com.

Sidechains entail some promising advantages that involve upgradability, scalability along with significant diversification. The prospects of diversification enable multiple users to gain access to the available asset throughout the blockchain. However, it might be a little daunting to upgrade a blockchain that is already established and also has some significant stakeholders.

It is not that easy to experiment in these areas as consensus-building is a time-consuming process and might also be impossible to execute successfully in most cases.

Polygon: The epitome of sidechain

When it comes to addressing the most prominent sidechain currently, Polygon cannot be omitted under any circumstances. Polygon has clearly displayed the relevance of sidechains in the cryptocurrency domain. The sole objective of Polygon is to create a platform for different blockchains to connect with each other successfully. Each sidechain has its unique variation which is designed to perform a specific function, for example, “Rootstock” and “Liquid”. 


So all said and done, the relevance of the sidechain has been explicitly shown in blockchain technology. Sidechains possess a tremendous potential to diversify the existing capabilities of cryptocurrencies. They also reduce the cost significantly and the prospects of asset transfer become easier. Bitcoin and sidechains dominate the trend and will continue to do so forevermore in the future.