Using Rootstock as an example, in order to transfer assets from one chain to the other a user on the parent first has to send their coins to a special output address where they will consequently become locked and un-spendable. Once the transaction is completed, SPV then confirms it across the chains and after waiting out a contest period, which is just a secondary method to help prevent double spending, the equivalent amount will be credited and spendable on the Sidechain and vice versa.
New organizational structures will emerge that will make inside/outside much less clear. These clear boundaries started to erode with the extranets in the 90s, then with the multi-tenant cloud platforms, and lately with the smartphones and the IoT. As we move forward we will see value chains where participants have multiple roles and affiliations. We will be designing token based systems that produce gains for any participants, internal or external.
A private blockchain on the other hand provides only the owner to have the rights on any changes that have to be done. This could be seen as a similar version to the existing infrastructure wherein the owner (a centralized authority) would have the power to change the rules, revert transactions, etc. based on the need. This could be a concept with huge interest from FI’s and large companies. It could find use cases to build proprietary systems and reduce the costs, while at the same time increase their efficiency. Some of the examples could be:
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.
Unfortunately our second option cannot be done yet, because to use these sidechains, main chain (here it is bitcoin) needs to do some upgrade (soft fork). By the way, upgrades in public blockchains are very painful yet. There will be a user activated soft fork (UASF) on August 1. All bitcoin forms’ trend topic is this soft fork which is about a code change for Segregated Witness Adoption.
The main point of a side-chain is to allow cryptocurrency networks to scale and interact with one-another. For example alt-coins and Bitcoin run on separate chains, however side chains allow for these separate currencies to be transferred through these two-way 'portal's or interfaces via a fixed conversion amount. Added benefits of side-chains are different asset classes like,stocks, bonds etc being integrated through a converted price onto the main chain, along with additional functionality like smart contracts,unique D-Apps, micro-payments and security updates that can be later incorporated into the primary network from these side-chains.
The first question to answer is “What is public blockchain?” The very name of this type of networks implies that they are open and permissionless. It means that anyone in the world can join the network, add blocks and view the information stored there. Indeed, public blockchains are totally transparent as any of their members can audit them. For this reason, independent participants can easily agree on transactions without middlemen and the fear of deception.
“Such brazen theft would indicate [1] that Bitcoin would be (in the near future) without sidechains of any kind, and [2] that Bitcoin itself may be in danger from the miners (and we may need to consider using an alternate proof-of-work hash function),” he explained the impact of this setup in his original post on the topic. Like SPV sidechains, drivechains require a soft-forking change to Bitcoin.
However, the Lightning Network would, again, require a change to the existing Bitcoin protocol. (Though again it would be a “soft fork,” i.e. the existing blockchain would remain fully valid.) And/or — you guessed it — a Lightning sidechain. What’s more, one of the changes it requires, the elimination of transaction malleability, is handled by the Segregated Witness work in Sidechain Elements. (correction: all of of the changes required are incorporated into Elements Alpha — it’s Lightning-ready out of the box.)
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]
The immense promise and accelerated development of permissioned blockchain technology, combined with intense business interest from a wide range of industries, is acting as a perfect stimulant for more and more enterprises to start rolling out blockchain networks into production. I envision these permissioned networks will soon directly or indirectly influence every facet of human enterprise.
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