Over the Horizon vol.003: Sidechains

Extending the Bitcoin protocol

Pegged sidechains are a protocol proposed in 2014 by the talented devs over at Blockstream — shoutout: Adam Back, Matt Corallo, Greg Maxwell, Andrew Miller, Andrew Poelstra, Jorge Timon and Pieter Wuille. This new tech will allow people to send Bitcoins to different blockchains. Wild right?

Here’s a quick breakdown

Bitcoin Blockchain & Sidechain connected by a 2way peg

Imagine 2 chains — a new blockchain (sidechain) is connected by a 2way peg to the original bitcoin blockchain. Once pegged, the user can temporarily lock their bitcoins on the OG Chain that they nor anyone else can use / have access to. The user then sends a message (as a transaction) to the sidechain letting it know their bitcoins are locked away. Once the sidechain verifies ownership (through SPV Security) of the bitcoins on the OG chain, the user will be credited an equivalent amount of bitcoins on the sidechain.

The user is able to perform the same process to get their bitcoins back on the OG chain.

Why is this a good idea?

Sidechains will allow you to have more control and flexibility over your bitcoins. You can now take advantages of things like lower fees and faster speed, all backed by the security of the bitcoin blockchain. Sidechains will also allow for people to use specific sidechains for things like more anonymity (MimbleWimble) or to test other protocols with willing participants.


Sidechains for now are still a concept; however, we’re excited to see what RSK labs cooks up with their rootstock sidechain in the coming months. The possibilities for innovation are endless because sidechains are a separate system from the bitcoin blockchain — technical and economic innovation is not hindered by consensus rules. More importantly, damages (security breaches) that occur on the sidechain are confined to the sidechain itself. In the long-term, the success of the changes in the sidechain can provide the needed confidence to change the OG chain if and when it’s deemed necessary to do so. It’s safe to say, sidechains are about to change the fucking game.





Kevin Adekayode
Head of Strategy, Masen