Put simply, sidechaining is any mechanism that allows tokens from one blockchain to be securely used within a completely separate blockchain but still moved back to the original chain if necessary. By convention the original chain is normally referred to as the "main chain", while any additional blockchains which allow users to transact within them in the tokens of the main chain are referred to as "sidechains". For example, a private Ethereum-based network that had a linkage allowing ether to be securely moved from the public Ethereum main chain onto it and back would be considered to be a sidechain of the public network.
Sidechains with specific purposes could be formed with specific features while still enjoying the widespread adoption and value that Bitcoin holds. Most importantly it can add these features without consensus from the Bitcoin community. Sidechains have the potential to replace many Cryptocurrencies as it allows features that were previously unique to these currencies to be available on Bitcoin. It also allows developers to experiment with sidechains and scope its full potential while still keeping coins linked to Bitcoin.
A blockchain is a continuously growing list of records called blocks, these blocks are linked and secured using cryptographic algorithms. Each block typically contains a hash (a link to a previous block), a timestamp as well as transaction data. Full nodes validate all the transactions, but are unable to settle the disagreements in regards to the order in which they were received. To prevent double-spending, the entire network needs to reach global consensus on the transaction order. It achieves this by using centralised parties or a decentralised proof of work or proof of stake algorithm (and its derivatives).
I have a hard time swallowing that Bitcoin “isn’t a ledger”. That’s like saying “Bitcoin isn’t the blockchain”, and if you take the blockchain away from Bitcoin, you aren’t really left with much (including, sidechains). Perhaps Bitcoin isn’t a ledger *from the perspective* of individual transactions, but by the same logic, nothing that isn’t transaction data is.
2) Yea, blockchain could be a suboptimal MQ Series, a slower append only persistent wire that has a lot of ready-made tools for audit and security analysis (ecosystem argument). As blockchain ecosystem grows all kinds of data transformation tools will appear (e.g. we are working on such). Inside blockchain could be tuned to be less PoW intensive and to cut blocks faster. Besides, the variations of PoS or a hybrid PoW + PoS scheme are emerging which could use the fact that inside, as you say, all network participants can have clear identities, unlike on the public bitcoin’s blockchain.
First of all, one should not confuse private and public blockchains. They have one obvious similarity – they are blockchains, decentralized networks. Every participant of the network keeps a copy of this shared ledger, and all these copies are kept sync with the help of a certain consensus protocol. It means that all the participants of the network have access to identical information. Also, all the networks are immutable, and the information they contain can’t be altered.
As we’ve talked about, writing to the blockchain is slow and expensive. This is because every node in the entire network needs to verify and slurp in the whole blockchain and all the data it contains. Executing a large smart contract on a blockchain can be prohibitively expensive, and doing things like storing images on blockchains is economically infeasible.
Governance: Every enterprise needs to design standards, processes, methods, and tools to develop and operate a private blockchain. To achieve this they will need tools and frameworks such as IDE, testing framework, security auditing tool etc. For long-term successful operation, they also need to develop high-quality documentation. This requires proactive governance. Read more about the importance of the “Fundamental challenges with public blockchains” here.
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.
Tú, o el usuario en cuestión de las sidechains, envía los bitcoins a una dirección Bitcoin específica, sabiendo que, una vez mandados, estarán fuera de tu control y fuera del control de cualquier otra persona. Estarán completamente inmovilizados y sólo se podrán desbloquear si alguien puede demostrar que no se están utilizando en ningún otro lugar.
Ethereum is an open-source blockchain platform that allows anyone to build and use decentralized applications running on blockchain technology. Ethereum is a programmable blockchain - it allows users to create their own operations. These operations, coded as Smart Contracts, are deployed and executed by the Ethereum Virtual Machine (EVM) running inside every node.
Cabe destacar el papel de la gente de Blockstream, una de las compañías centradas en la búsqueda de este objetivo (con un extremeño en sus filas, Jorge Timón). Blockstream está trabajando actualmente en el desarrollo de un protocolo que permita crear sidechains. Son los responsables de uno de los papers más conocidos sobre el tema, publicado en Octubre del 2014:
Sidechains are responsible for their own security. If there isn’t enough mining power to secure a sidechain, it could be hacked. Since each sidechain is independent, if it is hacked or compromised, the damage will be contained within that chain and won’t affect the main chain. Conversely, should the main chain become compromised, the sidechain can still operate, but the peg will lose most of its value.
By the end of this post, you’ll be able to freely participate in conversations like the above. This is not a coding tutorial, as we’ll just be presenting important concepts at a high level. However, we may follow up with programming tutorials on these ideas. This article will be helpful to both programmers and non-programmers alike. Let’s get going!
Since 2008 when Satoshi Nakamoto published a white paper considering Bitcoin and blockchain technology, the latter gained fame as a tool for combating trust issues and bringing transparency to transactions between independent participants. Even though a decade passed, for a lay public, blockchain is still not the easiest concept to deal with. As a rule, people generalize things they don’t understand deeply in detail. Thus, when they hear “blockchain,” they tend to think there’s just one transcendental blockchain that hosts thousands of projects. But it’s a wrong perception as there are numerous blockchains and they differ.
The differences between these types of blockchains are based on the levels of trust existing among the members of the network and the resulting level of security. Indeed, the higher the level of trust between the members of the network, the lighter the consensus mechanism (which aims to add the blocks to the blockchain securely). As we will see, there is no trust between the members of a public blockchain since it is open to everyone and inversely the confidence is much stronger on the private blockchain since members are pre-selected. In networks based on a blockchain, the level of trust among the members therefore directly impacts the structure and mechanisms of the network.
Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction. 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.