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    Crypto Valley Journal
    You are at:Home » Glossary » Sidechain
    Sidechain

    Sidechain

    0
    By Editorial Office CVJ.CH on 10. April 2020 | Updated 22. January 2024 Glossary

    A sidechain is an own blockchain that is connected to a mainchain. Sidechains aim to address the often-cited limitations of blockchain networks, such as delayed transactions and high fees.

    A sidechain is a separate blockchain that works in conjunction with an associated mainchain (e.g. Ethereum). It has its own consensus mechanism in most cases and is connected to the mainchain by a bridge (meaning that coins can be transferred to and from the mainchain to the sidechain).

    Sidechains: an early version of layer 2 solutions

    Imagine a global decentralized network of different blockchains, each with its own rules, functions, and purposes, that remain independent of each other while still forming a seamless ecosystem. This is the vision of the sidechain. An example of a current Ethereum sidechain is Polygon.

    Sidechains come in many variations depending on the functions they are built for. Liquid and Rootstock are both Bitcoin sidechains, but they function very differently, as the latter was specifically designed to execute smart contracts more efficiently. Ethereum 2.0, for example, has its own variant of sidechains, called shard chains, which are connected to the beacon chain (mainchain).

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