What is sidechain – on blockchain?

What is a sidechain?

Sidechains are protocols built into the main blockchain as a scaling solution. They are parallel blockchains running on the main blockchain. Sidechain solves the problem of congestion and enables the scalability of the network.

How Does This Work?

Proof of work blockchains such as Ethereum and Bitcoin has a limited number of transactions that can be processed on them, and receive a lot of validating workloads which results in slow finality. Every block transaction is expected to be validated in seconds, but due to its high network usage, the performance is delayed. Creating a solution to this problem requires an expansion of the block and a new Algorithm on the network. 

At some stage, developers choose to build a new chain alongside, these sidechains maintain the in and outflow of the primary block assets. 

There are two ways in which the sidechain transactions are pegged for interchangeable rates between the primary blockchain and the sidechain to enable the process of smaller transactions on the mainnet. To enable consensus on both chains, tokens are deposited and locked for some time on the validators nodes. The sidechain works as a proof of stake while scaling transactions for the main chain this asset is verified by multiple nodes on the mainnet.

Advantages of the sidechain.

Sidechains are independent blockchains, at most, integrated into the proof of work (PoW) blockchains and use its asset standard but function as a proof of stake (PoS) blockchain that represents the original standard blockchain. Other protocols can integrate into the sidechain as a representing scaling solution.

Sidechain works as a secondary scaling solution and addresses the limitations of the main blockchain, such as high transaction fees, and slow transaction processing speeds.

Security measure 

Sidechains can be open to attacks such as DDOS, due to the network functional mechanism, it requires lots of validating funds on the network, these funds serve complicated algorithms that secure the nodes while it runs on the main chain. Deposited funds are often requested to be staked on the network to strengthen the node’s processing power.

In conclusion, an example of a sidechain is the polygon network built on the Ethereum blockchain as a scaling solution.