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.
At Iryo, we consider databases and blockchains that are not opened to the public to be insecure they, can easily be altered by the business running it, at their discretion and it goes against the ethos of the open and transparent cryptocurrency space. Designed to keep public out and introducing “trusted” middlemen, private chains forget that trusted third parties are security holes.
Instead of adding new features directly to the bitcoin blockchain, sidechains allow developers to attach new features to a separate chain. Since the chains are still attached to the bitcoin blockchain, the features can take advantage of the cryptocurrency's network effects and test those applications, without harming the main network should vulnerabilities arise.

A side-chain is a separate block-chain that runs parallel to the main chain, for example the Bitcoin network, and is attached to the main chain through a simple two-way peg, or special 'address'. A user sends coins to this special address and this amount is effectively 'locked' out from use on the main chain and available on the side chain. This currency is released back to the main chain once its been proven that the side chain is no longer using it.
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.
Counterfeiting items is a $1.2 trillion global problem, according to Research and Markets 2018 Global Brand Counterfeiting Report. The rise of online commerce and third-party marketplace sellers have made the crime more prevalent in recent years. Blockchain technology can help consumers verify what they ordered online and what they receive in the mail is what they intended to purchase.
Sidechains as an idea have existed and had been floating around for quite some time now, the bases is to extend the decentralization of trust into other sectors and to other digital assets. However, while this all sounds great it's a perfect example of good in theory but not so much in practice. Nevertheless, this hasn't stopped people from trying with groups such as Blockstream exploring the idea and our friends over at Rootstock co-creating a Sidechain which is allowing Litecoin and Bitcoin to execute smart contracts and all without changing the core software of the original currency.

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.
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That might sound like a problem, but it isn’t because the box can only be opened infrequently (two or three times a year), and a super-majority of miners must leave a note on the box in advance. This note states exactly where the miners intend to transfer the money. The “correct” note is automatically generated by sidechain software, and is easy to check.
It may sound nitpicky, but I think that description leaves something to be desired in terms of presenting the “correct” mental model. First, there is no such thing as “a” bitcoin, as I am sure the author would agree. Speaking of spending or moving bitcoins perpetuates the notion of bitcoins as “things”. It might be preferable to say that you are spending or moving “units of the bitcoin protocol”. There is something similar going on here with dollars. The dollars in your bank account aren’t things either, they are units of demand or claim on a currency. The fact that printed dollars have serial numbers tends to confuse this notion. Treating something as a “thing’ which is not a thing is sometimes referred to as the reification fallacy.
The Blockstream Satellite network broadcasts the Bitcoin blockchain to the entire planet. The satellite network provides an opportunity for nearly 4 billion people without Internet access to utilize bitcoin while simultaneously ensuring bitcoin use is not interrupted due to network interruption. Utilizing the latest open source Software Defined Radio (SDR) technologies, the Blockstream Satellite network offers a breakthrough in the cost effectiveness of satellite communications.
Federated Blockchains operate under the leadership of a group. As opposed to public Blockchains, they don’t allow any person with access to the Internet to participate in the process of verifying transactions. Federated Blockchains are faster (higher scalability) and provide more transaction privacy. Consortium blockchains are mostly used in the banking sector. The consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants.
Jump up ^ Epstein, Jim (6 May 2016). "Is Blockchain Technology a Trojan Horse Behind Wall Street's Walled Garden?". Reason. Archived from the original on 8 July 2016. Retrieved 29 June 2016. mainstream misgivings about working with a system that's open for anyone to use. Many banks are partnering with companies building so-called private blockchains that mimic some aspects of Bitcoin's architecture except they're designed to be closed off and accessible only to chosen parties. ... [but some believe] that open and permission-less blockchains will ultimately prevail even in the banking sector simply because they're more efficient.
– we provide no uniqueness of names, unlike the domain registrars, social networks, namecoin, onename.io, etc. There is no uniqueness of names in real life either. Instead the identity is just a hash of a [json] object that contains a public key. Identity object can not be modified directly, but a new version of it can be created, pointing to a previous version. The owner of the identity object can optionally connect it with the real life credentials, e.g. the social account, internet domain, email, etc. by proving the proof of ownership of that account the way onetime.io does it, the way Google Analytics does it, etc. This allows a spectrum of identities from fully anonymous to fully disclosed and verified. This also allows a person to have multiple identities, for work, for social, for gaming, for interest-specific forums. To simulate OAUTH2, a new site-specific identity can be created and signed with person’s other identity.
As you can see, several of these real-world demands for the evolution of the initial Bitcoin implementation are still highly relevant. Trade-offs between scalability and decentralization are demonstrated with Ethereum’s focus on decentralization first and resulting complexities in developing scalable solutions. The increased emphasis on smart contract functionality, pegging real-world assets to blockchains, and experimentation of altcoins that are currently ongoing also represent the forward-thinking ideas outlined in the paper.
A blockchain is so-called “public” (or open) when anyone can become a member of the network without conditions of admission. In other words, anyone wishing to use the service proposed by the network can download the protocol locally without having to reveal his or her identity or meet predetermined criteria. A protocol is a computer program that could be compared to a Charter in that it defines the rules of operation of a network based on a blockchain. For example, the members of the bitcoin network download the Bitcoin protocol (through the intermediary of their “wallet”) to be able to join the network and exchange bitcoins, but the only condition is to have an Internet connection.
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Alpha functions as a sidechain to Bitcoins testnet. The peg mechanism currently works through a centralized protocol adapter, as stated in the sidechains whitepaper. An auditable federation of signers manages Testnet coins transferred to the sidechain. The federation is also relied upon to produce blocks through the signed blocks element. This creates the possibility of exploring the possibilities of the new chain using different security trade-offs.
The idea emerged that the Bitcoin blockchain could be in fact used for any kind of value transaction or any kind of agreement such as P2P insurance, P2P energy trading, P2P ride sharing, etc. Colored Coins and Mastercoin tried to solve that problem based on the Bitcoin Blockchain Protocol. The Ethereum project decided to create their own blockchain, with very different properties than Bitcoin, decoupling the smart contract layer from the core blockchain protocol, offering a radical new way to create online markets and programmable transactions known as Smart Contracts.
It may sound nitpicky, but I think that description leaves something to be desired in terms of presenting the “correct” mental model. First, there is no such thing as “a” bitcoin, as I am sure the author would agree. Speaking of spending or moving bitcoins perpetuates the notion of bitcoins as “things”. It might be preferable to say that you are spending or moving “units of the bitcoin protocol”. There is something similar going on here with dollars. The dollars in your bank account aren’t things either, they are units of demand or claim on a currency. The fact that printed dollars have serial numbers tends to confuse this notion. Treating something as a “thing’ which is not a thing is sometimes referred to as the reification fallacy.

The problem with Ethereum is that transactions are executed one after another. However, Aelf differs in its parallel computing blockchain capability. It scales transaction computing power inside a single side chain. Now imagine the power when you have thousands of side chains. For any unrelated transactions, it is safe to execute them concurrently.
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]

The great thing about Bitcoin, for a tech columnist like me, is that it’s simultaneously over-the-top cinematic and technically dense. Richard Branson recently hosted a “Blockchain Summit” at his private Caribbean island. There’s a Bitcoin Jet. At the same time, 2015 has seen the release of a whole slew of technically gnarly–and technically fascinating–proposals built atop the Bitcoin blockchain.

Sidechains interactuando con blockchain. Blockstream explica en su paper como, a las sidechains, se les añade una nueva pieza llamada two-way peg. Two-way peg es “el conector” entre ambas cadenas y se encarga de hacer la “magia” para que los bitcoins “salten” a la otra cadena. Juntando ambas cosas obtenemos las pegged sidechain: cadenas laterales conectadas en todo momento. En la imagen puedes observar como, incluso, las sidechain pueden interactuar entre ellas. ¿Llegaremos a un escenario de blockchains interactuando con aspecto fractal?
If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to "make whole" the investors in The DAO, which had been hacked by exploiting a vulnerability in its code.[31] In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.[32]
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.
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