Sidechain
A sidechain is a separate blockchain connected to a mainchain. It can process transactions without putting extra strain on the mainchain.
What is a sidechain?
A blockchain is a digital record where transactions are stored. A sidechain is a second blockchain alongside the mainchain, with its own rules for verifying transactions.
To move crypto to a sidechain, it’s first temporarily locked on the mainchain. Then the same amount becomes available on the sidechain. Moving it back works in reverse.
An example of a sidechain
Suppose someone moves some crypto from a mainchain to a sidechain. The original crypto is temporarily locked on the mainchain. That person can use the same amount on the sidechain.
The sidechain may process transactions faster or at a lower cost. If the user wants to move the crypto back, it’s removed from the sidechain, and the original crypto becomes available again on the mainchain.
Why are sidechains important in crypto?
Sidechains can reduce congestion on a busy mainchain. This can make transactions faster and cheaper to process. Developers can also use them to test new features or applications without changing the mainchain.
In crypto news, a sidechain may come up in discussions about plans for better scalability, lower costs, or new applications. This doesn’t automatically mean that a network is just as secure as the mainchain.
A sidechain often has its own security and relies on parties that verify transfers. Errors, fraud, or attacks can pose a greater risk on a small network or when validators are untrustworthy.
