Bitcoin Forum

Now, in the Lightning Network, all transactions are stored by all parties that have some open channel between them. There is a need for watchtowers, sometimes some payments are impossible to route because of too low amounts on "proxy peers". How it will turn out if we put all of this stuff on a sidechain? On Bitcoin, there still will be two transactions: one depositing coins into the sidechain and another, withdrawing them. Both can be constructed in the same way as in LN.

Currently, in the Lightning Network, nodes have to be online 24/7, all the time, because in other case someone could send some older transaction and close the channel with older account balances that it should be closed. If they cannot be online, they have to use watchtowers. In the sidechain, there will be no need for using additional watchtower, because every sidechain node will act as a global watchtower for the whole network, as it is organized in Bitcoin when you can send on-chain transaction and wait for confirmations.

The routing problem will be solved by creating different closing transaction. If Alice and Bob have some channel, but Alice wants to send coins to Charlie, which for example uses only on-chain Bitcoin coins, then all that is needed is creating a bit different closing transaction, taking Alice and Bob coins as an input and at least three outputs that could be spent only by Alice, only by Bob and only by Charlie.

I am confused by your topic. Are you comparing LN and Sidechains or you mean LN on side chain?


After reading on side-chain I learnt that, if a coin is transferred from the parent chain to side chain that it will pass through a simplified payment verification before it will be withdrawn back to its parent chain. And they are some times required before this withdrawal can take place. So if a coin is on a sidechain it's quite secured and may not be attacked unless the SPV client is under a serious Sybil attack.

I'll suggest you read this article that talks about two-way peg. https://en.bitcoin.it/wiki/Sidechain don't get me wrong, I didn't understand your questions so I had to contribute in my understanding. If you are a pro on this. Please explain to me better especially your last paragraph.

Wouldn't scale the way LN does though. Quite the opposite really.

LN is improving scalability by moving transactional data off a global state (ie. the blockchain) onto a state that needs to be only locally persisted (or to some extend by the watchtower of your choice). By using sidechain nodes as watchtowers you'd be moving the transactional data that we just neatly tucked away in private back onto a publicly broadcasted blockchain, just with additional overhead. So we'd be back at square one (ie. the blockchain scalability problem), just with added complexity and more data than we initially had on top.

Now, one could use LN to improve the scalability of a sidechain -- but that's a different story altogether.