Sidechain, future of bitcoin.

What is sidechain?

Sidechain is a activly developing technology, which allows tokens or other cpypto assets of one blockchain to be safely used in another blockchain and (in case of need) be returned in original blockchain. The concept starts in 2014 in whitepaper written by the developers of Blockstream.

How it is work?

At the moment, there are several ways to use the sidechain: federation, drive, SPV or so-called hybrids, which combine the properties of several methods. Now take an example with the federation. User of blockchain must first send coins to the outgoing address, where they are "locked" by members of the so-called "federation", which is designed to exclude the possibility of their spending elsewhere. Upon completion of the transaction, participants receive confirmation, but for additional security this happens after a certain waiting period. After that, the equivalent number of coins is transferred to the sidechain, and the user has an opportunity to spend them. When sending coins from the seidchechan to the main block, the reverse process occurs.

What is it for?

This will allow in the future to create a global network of multiple woven interlocked blockchain. This will allow the future to create a global network of many tied blockchains, each of which will have its own protocol, rules and a set of functions. All of them, however, will be tied to bitcoin and protected by its mining network. Saidchain can also be used to model the changes considered for the bitcoin codebase.

What is "federation"?

The federation is a group of operators acting as an intermediate point between the main chain and one of its members. Federation determines when the user's coins are "locked" and when they can be spent. In this case, the creators of the sidecheans can choose the federations. The disadvantage of such models is the availability of additional resources between the main chain and the block and, as a consequence, the risks of centralization.

What is SPV sidechain?

Saidchein SPV is an original concept of decentralized two-way peg. In order to move assets from the side-owner and vice versa, this type of side-owner uses SPV-proof. SPV-proof is a way to prove the existence of a transaction in a block through a small amount of data associated with the existence of this transaction in a specific block. In other words, the SPV sidechain moves the bitcoins between the main block and the sidechain after obtaining proof that the transaction reporting the movement of bitcoins between the two chains has been placed in the block. For the functioning of the SPV sidechains, it requires softfork of bitcoin. SPV doesn't provide the keeper with direct control over the resources in the main blockchain. Nevertheless, the ability of most of the miners to create fraudulent SPV-proofs gives them indirect control over the resourses, including the ability to send them to themselves. However, there are ways to reduce this problem.

What is drivechain?

Drivechain is an alternative sidechain concept, described in the original whitepaper. In the drivechain the miners report on the current state of the sidechain. In other words, miners are keepers of resourses, they can "unfreeze" them for users, who want to move their coins back to the main blockchain. One of the main rules of drivechain is that the miners are the least problematic keepers of the resourses used in the sidechain, from the point of view of game theory.
According to Storz, drivechains can be structured in a way that any stealing of frozen assets in the main block is initiated by the miners.

Quote from: the creator drivechane Paul Stortz

Such a blatant theft will mean that (in the near future) Bitcoin will lose all the sidechains, and that Bitcoin himself may be in danger from the miners (and we will have to think about using an alternative function of proof-of-work).

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