Blockchain technology is designed to provide a decentralized, secure and transparent database. However, there are some challenges with the scalability and performance of the blockchain. For example, the Bitcoin network can handle about 7 transactions per second, and the Ethereum network about 15 transactions per second. This is quite low compared to traditional payment systems.
To solve this problem, the concept of the side chain, another blockchain that connects next to the blockchain and operates independently of the main chain, has emerged. Sidechains offer faster, cheaper and more flexible transactions than the main chain. Side chains are linked to the main chain via a two-way bridge. Through this bridge, users can transfer a certain amount of tokens or digital assets from mainchain to sidechain or from sidechain to mainchain.
Sidechains have their own tokens, protocols, consensus mechanisms and security as they are independent of the main chain. Sidechains can be both public and private. Public sidechains are open to everyone, while private sidechains are controlled by a specific group.
What are the advantages of side chains?
The biggest advantage of side chains is that they increase the throughput without tiring or clogging the main chain. Transactions performed on side chains are not reflected on the main chain, only transfer transactions are recorded. This reduces transaction fees and waiting times on the main chain.
Sidechains also offer more customization and innovation. Different parameters and algorithms can be used in side chains. For example, block duration and size on sidechains may differ from the main chain. Sidechains can also support different smart contract languages or implementations.
What are the disadvantages of side chains?
The biggest disadvantage of sidechains is that they are independent of the main chain and cannot take advantage of its security features. Sidechains have to ensure their own security. This increases the risk of attacking the sidechains. For example, if the number of nodes controlling the sidechain is small, cooperation or cheating can occur between these nodes.
Sidechains can also create complexity and compatibility issues. To migrate to sidechains, users must follow a certain process. This process can negatively affect the user experience. In addition, standards and protocols need to be developed to transfer data and value between sidechains or between the main chain and sidechains.
What are examples of side chains?
Sidechains can be connected to different blockchain networks. For example, sidechains connected to the Ethereum network include projects such as Polygon, xDai, Binance Smart Chain, Skale Network. These projects offer different solutions to solve the scalability and fee issues in the Ethereum network.
Sidechains are part of second-tier blockchain solutions. Layer two solutions are solutions that build on top of the main chain without changing or breaking it. Besides sidechains, second-layer solutions also include channel-based and rollup-based solutions.
Conclusion
Sidechains are an important concept developed to solve scalability and performance issues in blockchain technology. Sidechains are another blockchain that is connected to but independent of the main chain. Side chains offer faster, cheaper and more flexible transactions than the main chain. However, side chains also have some disadvantages. Sidechains may encounter different security and compatibility issues than the main chain.