10 interesting Sidechains possibilities


Blockchain is a technological revolution that was born only ten years ago with Bitcoin. The open-source requirement and its free philosophy permitted us to see many other projects to come to fruition. Some of these projects faced some problems or needed some improvement to offer solutions to users.

Blockchains are facing scalability problems to be prepared for mass adoption. As we saw in December 2017, transactions took more time than usual, and fees jumped as well. This is due to the capacity of blockchains that can’t handle as much as transactions that can do visa or MasterCard.

The sidechain answers well to that problem! A sidechain is a blockchain that works in parallel to the original blockchain, which will be called main chain. The sidechain has the particularity to be interoperable with the main blockchain. That means that we can transfer coins from one the main chain to the sidechain. I won’t detail how is it working here, for that you can go here and wait for the next article on this subject.

Here I want to talk about Sidechains and what they bring to the blockchain industry. We will review ten points that are, for me, the main greatest possibilities they give.

  1. Scalability

Scalability is the reason why sidechains exist. As we said earlier blockchain has already, in most cases, a great number to transactions (financial ones and messaging ones for example) to operate. Adding services as we are talking about in this article would increase the speed of the main chain. With sidechains, it’s possible to split services into many chains and then permit it to be more scalable.

2. Data storing

Blockchain is a data structure, that’s a way to store, organize and manage data. But as we just saw on the last point, if you have too much data in a blockchain, then it won’t be fast. You can store a kind of data in a sidechain, and every data you want! Thanks to encryption, even if the blockchain is transparent, you can store data in a private manner.

3. DAO / Treasury system

A Decentralized Autonomous Organization is, at its called, an organization that allows more decentralization. I think that every blockchain project should become a DAO and have this enhancement in their roadmap. I wanted to stop at Horizen project here, where the first sidechain will be dedicated to offering a treasury system to permit their organization to be autonomously decentralized.

4. VPN

A Virtual Private Network permits to encrypt your internet connection. This is something well known and that doesn’t necessarily need to be on blockchain to work. However, the network given by blockchains is a very strong argument in favour of using the blockchain’s infrastructure to offer this service. Indeed, with all the nodes that make up the blockchain (and the sidechains that go with it if the project proposes any) is a real asset in network security. In addition, choose a project that respects your privacy, and you will then be sure to have a reliable VPN service. Having the VPN system on the sidechain permits to maintain performance on the blockchain

5. Smart contracts

Smart contracts are fantastic and well-known in the blockchain community. That’s a software that a blockchain can host thanks to its sidechain, which also can be hosted in blockchain, but doing it in a sidechain will permit to improve the pace. They guarantee an execution when some conditions are fulfilled. To use a very good example given in the Horizen Academy: “If the contract address receives amount X by the 3rd of each month from address Y, grant Y access to the apartment. If payment fails for 2 consecutive months, revoke the right of Y to unlock the apartment”

6. dApps

DApps are something great too! That’s decentralized applications, some software, that can live on blockchain’s sidechains thanks to smart contracts that we just saw above. You can, for example, create a game on a dApp, an exchange, a gambling application, insurance…

7. Token creation

If someone wants to have a blockchain for their project but doesn’t want to do it from scratch or oven from a fork, he can create their token on a sidechain. Then they can still contribute to the project they like and still participating in it while they have their token.

8. Services to companies

With sidechain, you can sell blockchain services to companies! For now, most companies choose to use blockchain integrators and taking private blockchains to use it. For example, Horizen Labs is a company that will use the Horizen blockchain, to offer services to companies, via its sidechains.

9. Faster transactions (and instant payments)

Another important point is to permit instant payments! In a sidechain, you can have a different consensus mechanism that permits faster block times, and as a result, faster transaction. No more complaining about the 10 or 2.5 minutes wait for a block to be confirmed.

10. Keeping the blockchain safe

If something goes wrong on a sidechain, the main chain won’t be impacted and will continue its life! It is still recommended to try dApps and new releases on the testnet, of course, but that can provide additional security.

You understood sidechains aim to answer to scalability problem and permit to create a bunch of services using blockchain’s infrastructure. But other solutions answer to that problem. Do you see some other sidechain features I didn’t talk about? Do you agree with me, or do you think there are other solutions that permit all these possibilities? I would love to have your point of view!

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade