How to Explain Sidechains to a Parent
Bitcoin. Blockchain. Sidechain.
Bitcoin is not easy to explain. Neither is the blockchain.
That leads to another technical term that has arrived to cryptocurrency world. That’s right, we’re talking about…
But what are sidechains?
We’re glad you asked…
Because we asked some experts on ZapChain to explain it.
There is not a lot of ability for experimentation on the bitcoin blockchain.
Because of this, sidechains were proposed as a way to test new theories.
“The bitcoin network is reaching scaling limits. Sidechains act as a sort of relief valve for the bitcoin network.”
To test bitcoin’s scaling limits, a company called Blockstream, which has raised $21 million from investors, proposed the sidechains concept.
“Sidechains allow experimentation with new features & capabilities for bitcoin without risking the entire network.”
With sidechains, bitcoins can move to an experimental blockchain by using a two-way peg to enable a gateway for testing new concepts.
“Sidechains let anyone transfer coins from one blockchain to another. It can be very useful if we wanna create “better” bitcoin networks.”
The use of sidechains allows engineers to attempt interesting ideas with cryptocurrencies — like smart contracts, digital identity and other research.
“Sidechains are a way to build other digital currencies like bitcoin but leaving a lot of room for innovation.”
Today there are hundreds of alternative crytpocurrencies (altcoins) other than bitcoin. Most of them are very experimental, and usually die out.
“Effectively, [sidechains allow] altcoin development and innovation, without each new chain having its own currency but using bitcoin.”
Cryptocurrencies are still new, and there’s a still a lot to learn. Sidechains allow for this…
…using the power of bitcoin to try new and untested ideas.
