The ethereum-based app builder has a dedicated team of experts looking at all varieties of fiat cash on distributed ledgers, and it's working with UnionBank of the Philippines to create a low-cost tokenized fiat solution for rural banking. In time, this could be extended to cover a larger network of banks and perhaps even the central bank, ConsenSys says.
A sidechain is a separate blockchain that is attached to its parent blockchain using a two-way peg. The two-way peg enables interchangeability of assets at a predetermined rate between the parent blockchain and the sidechain. The original blockchain is usually referred to as the ‘main chain’ and all additional blockchains are referred to as ‘sidechains’. The blockchain platform Ardor refers to its sidechains as ‘childchains’.

Decentralized web. The sidechain technology holds premises to expand one of the main values of the blockchains – the decentralization of confidence. There is no need for central structure behind the transactions - the holders of cryptocurrencies are free to use their assets the way they want. The sidechains make their deals even more protected and reliable.
“Such a move could allow retailers to lower prices and incentivize consumers to shop at one retailer over a competitor,” Cohen noted. “This idea is not as ludicrous as it might seem. Amazon recently registered three cryptocurrency-related domain names, suggesting a potential move into the cryptocurrency space. If large companies like Amazon, Walmart or Starbucks issued digital coins that inspired public trust, blockchain-based cryptocurrencies might gain acceptance by the public and other retail giants.”
“Blockchain offers a possible solution to these challenges with its decentralized ledger that can store a history of transactions across a shared database,” Cohen said in the report. “By making the record accessible and verifiable from anywhere in the world, blockchain can enable the authentication of goods and eradicate the criminal element of counterfeit goods in the retail supply chain. By pairing hardware chips with blockchain technology, a product can take on a digital history, going as far back as the raw materials that were used to make the product. This allows retailers and consumers to verify their purchased products are genuine.”
The consortium or company running a private blockchain can easily, if desired, change the rules of a blockchain, revert transactions, modify balances, etc. In some cases, eg. national land registries, this functionality is necessary; there is no way a system would be allowed to exist where Dread Pirate Roberts can have legal ownership rights over a plainly visible piece of land, and so an attempt to create a government-uncontrollable land registry would in practice quickly devolve into one that is not recognized by the government itself. Of course, one can argue that one can do this on a public blockchain by giving the government a backdoor key to a contract; the counter-argument to that is that such an approach is essentially a Rube Goldbergian alternative to the more efficient route of having a private blockchain, although there is in turn a partial counter-argument to that that I will describe later.
A Sidechain, in simplest terms, is just a separate blockchain but is attached to the parent through the use of a two-way peg which allows for assets to be interchangeable and moved across the chain at a fixed deterministic exchange rate. This two-way peg works by utilizing simple payment verification or SPV as it's otherwise known. To show and prove ownership of the assets on the parent chain.
State of the art public Blockchain protocols based on Proof of Work (PoW) consensus algorithms are open source and not permissioned. Anyone can participate, without permission. (1) Anyone can download the code and start running a public node on their local device, validating transactions in the network, thus participating in the consensus process – the process for determining what blocks get added to the chain and what the current state is. (2) Anyone in the world can send transactions through the network and expect to see them included in the blockchain if they are valid. (3) Anyone can read transaction on the public block explorer. Transactions are transparent, but anonymous/pseudonumous.
Sidechain is a chain of blocks based on the main parental blockchain. Sidechains realize the new financial ecosystems via integration into Bitcoin. Relatively new to Bitcoin, the sidechain is an extension that enables the ability both to build a link between BTC and an altcoin and to create new independent services that work via the main Bitcoin blockchain. Using sidechains allows for the creation of various types of smart contracts, stocks, derivatives, etc. It is possible to develop a limitless number of Bitcoin or Ethereum-based sidechains with different tasks and features, assets of which will depend on the main blockchain’s volatility. It allows traditional blockchains to support several kinds of assets, payments, smart contracts and also to increase the level of security and anonymity of transactions.

“Blockchain offers a possible solution to these challenges with its decentralized ledger that can store a history of transactions across a shared database,” Cohen said in the report. “By making the record accessible and verifiable from anywhere in the world, blockchain can enable the authentication of goods and eradicate the criminal element of counterfeit goods in the retail supply chain. By pairing hardware chips with blockchain technology, a product can take on a digital history, going as far back as the raw materials that were used to make the product. This allows retailers and consumers to verify their purchased products are genuine.”

Saying that, Interoperability has been the missing link in conquering the obstacles faced by both private and public blockchains by empowering them to interact and exchange values across platforms seamlessly. Developers use of the Gallactic blockchain technology, that allow for private and public blockchains within its eco-system, will drive the potential to combine both public and private blockchains with innovative new solutions, designed to accomplish cross-chain exchange and greater compatibility is the way forward for all parties and their concerns.

Thus Tradle set out to build a meta-protocol that saves the data in the overlay network, and only puts minimal referencing data on the blockchain. There is a general grumpy consensus among bitcoin core devs and mining pool operators on allowing one small data chunk, a hash, per transaction. Many devs say it is not possible to secure this second overlay network. I agree, unless we use the blockchain to help with the task. We have a partial solution working, and are preparing a new design to improve it (partial, as it can not yet handle all known attacks). We are actively sharing the designs at various meetups (and on the github) and are inviting devs to find attack vectors and propose solutions. Tradle’s protocol not only relieves the pressure on bitcoin’s blockchain but is also able to handle larger transaction sizes than Counterparty and Mastercoin, so it can be used for complex identity, supply chain management and many other applications. It is also capable of handling attachment files, needed in the healthcare and financial industries.

“The consortium or company running a private blockchain can easily, if desired, change the rules of a blockchain, revert transactions, modify balances, etc. In some cases, e.g. national land registries, this functionality is necessary; there is no way a system would be allowed to exist where Dread Pirate Roberts can have legal ownership rights over a plainly visible piece of land, and so an attempt to create a government-uncontrollable land registry would in practice quickly devolve into one that is not recognized by the government itself….


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@Tradle. Thanks for elaborating. I’m also thinking about these things – and hear lots of other people talk about them – but I *really* struggle with the concept. It all comes down to the table I drew in this post: https://gendal.me/2014/12/19/a-simple-model-to-make-sense-of-the-proliferation-of-distributed-ledger-smart-contract-and-cryptocurrency-projects/
• ‘Difficulty’: In the Bitcoin network, miners solve an asymmetric cryptographic puzzle to mine new blocks. Over time the puzzle becomes easier, resulting in it eventually taking less than 10 minutes for each new block generation. Hence, the community updates the puzzle every 14 days and makes it more difficult, thus requiring even more computing power to handle the POW algorithm. The ‘difficulty’ parameter controls the complexity of the cryptographic puzzle. This parameter is also used in the Ethereum blockchain as well. Developers should assign a low value (between 0-10,000) to this parameter for this project thus enabling quicker mining.
thank you for the clear explanation of this. so in essence, by locking bitcoins to a particular address we’ve created an asset (collateral). then on the other sidechain (marketplace) we get issued shares against the asset, which we can sell. anyone holding a share can then redeem it against the asset. I think that’s an analogy that finance types would get

The sidechains vision of the future is of a vast globe-spanning decentralized network of many blockchains, an intertwined cable rather than a single strand, each with its own protocol, rules, and features — but all of them backed by Bitcoin, and protected by the Bitcoin mining network, as the US dollar was once backed by gold. Sidechains can also be used to prototype changes to the fundamental Bitcoin blockchain. One catch, though: this will require a small tweak to the existing Bitcoin protocol.
Saying that, Interoperability has been the missing link in conquering the obstacles faced by both private and public blockchains by empowering them to interact and exchange values across platforms seamlessly. Developers use of the Gallactic blockchain technology, that allow for private and public blockchains within its eco-system, will drive the potential to combine both public and private blockchains with innovative new solutions, designed to accomplish cross-chain exchange and greater compatibility is the way forward for all parties and their concerns.
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