“We believe that public blockchains with censorship resistance have the potential to disrupt society, when private blockchains are merely a cost-efficiency tool for banking back offices. One can measure its potential in trillions of dollars, the other in billions. But as they are totally orthogonal, both can coexist in the same time, and therefore there is no need to oppose them as we can often see it.” 
This type of permissioned blockchain model offers the ability to leverage more than 30 years of technical literature to realize significant benefits. Digital identity in particular, is fundamental for most industry use cases, be it handling supply chain challenges, disrupting the financial industry, or facilitating security-rich patient/provider data exchanges in healthcare. Only the entities participating in a particular transaction will have knowledge and access to it — other entities will have no access to it. Permissioned blockchains also permit a couple of orders of magnitude greater scalability in terms of transactional throughput.
Sidechains allow cryptocurrencies to interact with one another. They add flexibility and allow developers to experiment with Beta releases of Altcoins or software updates before pushing them on to the main chain. Traditional banking functions like issuing and tracking ownership of shares can be tested on sidechains before moving them onto main chains. If the security mechanisms for sidechains can be bolstered, sidechain technology holds promise for massive blockchain scalability.

Confidential Transactions — At present, all Bitcoin transactions are completely public, albeit pseudonymous. Confidential Transactions, as the name implies, conceal the amount being transferred to all except the sender, the recipient, and others they designate. The resulting transaction size is significantly larger, but includes a sizable “memo” field that can be used to store transaction or other metadata, and is still smaller than eg Zerocoin.(Note that this isn’t as confidential as Zerocash, which conceals both the amount and the participants involved in any transaction, through the mighty near-magic of zk-Snarks. Mind you, Zerocash would require an esoteric invocation ritual to initiate its network. No, really. But that’s a subject for a separate post.)
The witnesses who put more funds in escrow have a greater chance of mining (or minting) the next block. The incentives line up nicely here. There are only a few witnesses and they get paid to be witnesses, so they are incentivized to not cheat. If they do cheat and get caught, they not only get voted out in favor of the next eagerly awaiting witness, they lose all the funds they had in escrow.

The witnesses who put more funds in escrow have a greater chance of mining (or minting) the next block. The incentives line up nicely here. There are only a few witnesses and they get paid to be witnesses, so they are incentivized to not cheat. If they do cheat and get caught, they not only get voted out in favor of the next eagerly awaiting witness, they lose all the funds they had in escrow.

It doesn’t matter if you’re moving $1bn or 0.01c across the Bitcoin network, you get the same security guarantees.   And you pay for this in fees and time.   What if you were prepared to trade safety for speed?   Today, your only real option is to send the coins to a centralized wallet provider, whom you must trust not to lose or steal your coins. You can then do all the transactions you like on their books, with their other customers and you never need touch the Bitcoin blockchain. But now you lose all the benefits of a decentralized value-transfer network.


The consensus mechanism involves ascertaining transaction validity and uniqueness. Smart contracts address the validity portion. To ensure uniqueness, the protocol program in Corda checks whether any other transaction has used any of the input states of this transaction. If no other transaction has used any of the input states, that this transaction is unique.
Perhaps blocks are created faster on that sidechain. Perhaps transaction scripts are “turing complete”. Perhaps you have to pay fees to incent those securing that sidechain. Who knows. The rules can be whatever those running that sidechain want them to be. The only rule that matters is that the sidechain agrees to follow the convention that if you can prove you put some Bitcoins out of reach on the Bitcoin network, the same number will pop into existence on the sidechain.
Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[55] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But "no viable smart contract systems have yet emerged." Due to the lack of widespread use their legal status is unclear.[56]
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