The concept of sidechain was designed when layer2 type solutions (additional layer backed by a main chain) were put in place to fill the gaps in the main blockchains.
A sidechain (also called a side chain) is, to put it briefly, an alternative blockchain which is created in parallel to improve the performance of an existing blockchain.
A sidechain can then interact with the existing blockchain without compromising its existence because the two are independent. The sidechain has different programming and different functionalities from the main blockchain, while being compatible with the chain to which it is attached.
To give you a clear example of the usefulness of sidechains, let's start with the example of Bitcoin. For example, we cannot create Dapps on this blockchain but we can very well imagine doing it with a sidechain which would interact bidirectionally with Bitcoin. It is therefore the ideal solution (for the moment) to be able to extend the functions of a blockchain without having to touch a single line of its code.
This is why sidechains are considered an essential innovation in blockchain technology. This simply allowed us to push the limits of existing blockchains.
Beyond the possible extensions, sideschains were designed to also improve the overall performance of a blockchain.
Sidechains are part of the new solutions brought to the blockchain to make it more scalable in general. The mechanism used with sidechains consists of processing different operations on a chain separate from the original chain. This is how we unclog the "main chain" in a way and therefore indirectly make it more efficient.
The secondary and additional chains created on the main blockchain are then called "sidechains". The word side in English means "alongside", with the idea that this sidechain therefore works in parallel with the main chain.
How do Sidechains work?
As we saw in the introduction, a sidechain is therefore a separate blockchain, certainly, but which remains attached to the parent blockchain. We will then use a bidirectional peg to allow "communication" between the two. It is this anchoring that will allow the interchangeability of assets between the parent blockchain and the sidechain.
Technically, a mainchain user will send their assets/tokens to an exit address, where there, the tokens will be locked so that the user in question cannot use them otherwise. When the transaction is completed, confirmation is then sent through the sidechains. There may be a certain delay equivalent to the number of tokens released on the sidechain and it is from there that he will be able to access and spend them. There is of course the reverse process when there is a return from the sidechain to the main chain.
You indirectly understand that there are connection points between the main chain and the sidechains. These points are called "federations".
Let's see what it's all about.
What are federations for?
A federation is considered as a group which will serve as an intermediary point between the main chain and the sidechains. The federation takes the form of an additional layer between the main chain and the sidechain. This group will then determine when assets are used, locked, and released. It is the creators of the sidechain who can select the participants of the federation.
Security with sidechains
You should know that sidechains are required to manage their own security. If, for example, there is not sufficient computing power, naturally, this could be subject to hacker attacks. That said, sidechains are independent, and therefore, if they are hacked or hacked, then it is only the sidechain that will be affected and not the main chain. Conversely, if it is the main chain which is affected and hacked, then certainly, the sidechain will not be compromised but the anchor point between the two chains will be compromised..;
This is why it is essential that sidechains have their own miners to guarantee the overall security of the chain. There may even be cases of merged mining where two different cryptos will be mined, being based on the same algorithm.
Some projects that use sidechains
To better understand sidechains, here are some of the most famous projects that use this innovation.
RSK (Abbreviation for Rootsock)
RSK launched an open source testnet called Ginger for its sidechains. RSK is particularly interested in the ultimate blockchain, namely Bitcoin. It has a two-way connection to the Bitcoin blockchain and rewards Bitcoin miners via so-called merged mining. RSK's big mission is to enable the Bitcoin blockchain to be able to use smart contracts and to be able to execute payments more quickly.
We could also have mentioned the project created by Blockstream with its network Liquid. Liquid's mission is to make Bitcoin transactions faster too. This was one of the first projects to look at it.
Lisk
Lisk has attracted a lot of attention because it is a sidechain platform that allows developers to launch Dapps in the JavaScript programming language. It is therefore an excellent platform for developers because it is the language most used by developers. Lisk has its own token (LSK) and allows you to create sidechains for all blockchains that need them and want to deploy Dapps.
If Lisk has been particularly well received, it is also given its scalability thanks to its dPOS which radically increases the speed of operations. In short, it is the reference platform in terms of sidechain.
Why are sidechains important for blockchain technology
As you have understood (normally), sidechains make it possible to improve blockchains via a well-designed system. Sidechains allow the transfer of assets to other blockchains in a simple way.
Finally, sidechains have several uses including being able to add new special features to blockchains without having to modify its protocol. This is again a considerable advantage. This can then bring new uses and uses. Developers generally take advantage of this to test functions, in beta for example.
Overall, the sidechains deployed so far will increase security and minimize market fragmentation while making uses and experiments more flexible.
What remains fundamentally great about sidechains is the fact that they are independent of the main chain. That being said, despite this independence, they can communicate with each other. We can therefore experiment -without risk- with new functionalities, without having to modify the main chain.
In any case, thanks to sidechains, blockchain technology has gained a certain scalability which proves useful, even essential. That said, and it is also an opening to deeper reflection, we can wonder if Layers 2, with sidechains or otherwise, did not ultimately bring more complexity to technology as a whole. Wouldn’t it be ideal to create a powerful blockchain from the start…?
Only the future will tell us...
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