What Is a Sidechain?

A sidechain is a blockchain that is connected to the main blockchain, also known as the mainnet or parent chain, through a two-way peg mechanism.

The purpose of sidechains is to address the issue of scalability and speed in the crypto world.

Enhancing Blockchain Efficiency

Instead of performing all operations and calculations on the main blockchain, specific processes can be offloaded to a sidechain, simplifying and accelerating transactions while maintaining the same level of security as the main chain.

Sidechains enable various forms of interaction with the main chain, but the fundamental feature is the ability to transfer assets between chains using a two-way peg.

This peg consists of lockboxes on both the main chain and the sidechain.

How Do Sidechains Work?

Using a sidechain involves the main chain user sending coins or digital assets to an output address, which becomes locked and unspendable on the main chain.

The transaction is then confirmed and propagated across the chains. A waiting period is often required for added security.

After this waiting period, the coins or assets are fully transferred to the sidechain, allowing users to transact and interact with them on the new network freely.

Sidechains can take different forms depending on their intended functionality.