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Author Topic: Bitcoin Sidechains for dummies  (Read 190 times)
Husires
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July 10, 2020, 11:28:49 AM
Merited by Royse777 (5), ETFbitcoin (2), Heisenberg_Hunter (2), OgNasty (1), DdmrDdmr (1)
 #1


Disclaimer: The information contained in this explanation is the result of my understanding of Schnorr Signatures and may contain some errors. Search and confirm the information.


Table of contents

      1. Introduction
      2. What are Bitcoin Sidechains?
      3. How Do Sidechains Work?
      4. Bitcoin Sidechains


Introduction

Bitcoin is characterized by a number of unique features with a net value of about $ 166.4 billion, a strong network based on the blockchain and enhanced by its decentralized nature, and peer-to-peer transactions that enable you to send money to everyone in the world.

But it comes with some of the problems that Sidechains solve, most notably, slow transactions per second, and scalability problems, as well as high transaction costs when there is network congestion.

What are Bitcoin Sidechains?

Think about it as you have two ways, you go from first to second according to your needs, the first is lengths and takes time, but it is safe and the second is fast and suitable for those who want to reach faster.

In this case, the main Bitcoin blockchain, and another blockchain (sidechain)
You can then move bitcoin from the main blockchain to the sidechain and back if necessary.

But it does offer features like increased flexibility and some privacy as it provides more transactions per second faster than the basic blockchain a reliable platform for Bitcoin users to trade.

note that sidechains are independent of the main blockchain.


How Do Sidechains Work?

Because these networks are independent, any problem that occurs to sidechain does not affect the main blockchain, and therefore the responsibility rests with the trust in the sidechains developers who are responsible for their security as they decide when the user's currencies are locked and launched which leads to the possibility of centralization.

You will have an address to which you will send these transactions and after obtaining the required confirmations you will get the same number of coins, you can use the coins freely in sidechain. The opposite happens if you want to transfer money from sidechain to the main blockchain.

Bitcoin Sidechains

  • Rootstock
  • Liquid
  • Hivemind

Rootstock

Bitcoin sidechain that enables and runs smart contracts, At its very core, Rootstock is a combination of:

  • A Turing-complete resource-accounted deterministic virtual machine (for smart contracts)
  • A two-way pegged bitcoin sidechain (for BTC denominated trade)
  • A dynamic hybrid merge-mining/federated consensus protocol (for consensus security), and a low-latency network (for fast payments).

Information source http://blockgeeks.com/guides/rootstock-blockchain/


Liquid

speeds up Bitcoin transactions and enables the digital asset proceeds, with some Features:

  • Rapid Transfers ( fully settled within two minutes)
  • Issue New Assets (Anyone can issue new assets on Liquid, including stablecoins and security tokens)
  • Confidential Transactions (Asset types and amounts are hidden by default on the Liquid sidechain)
  • Secure Trading (Each asset on Liquid can be swapped for any other asset using the open source Liquid Swaps Tool)

How Does Liquid Work?

All Liquid Bitcoin (L-BTC) are verifiably 1-to-1 backed by bitcoin. Anyone can move bitcoin to the sidechain through a peg-in using a Liquid full node.
Assets issued on Liquid are native to the sidechain
All that is required to participate in the Liquid Network is a Liquid wallet or full node

Information source https://blockstream.com/liquid/

Bitcoin Hivemind

Open-source, P2P Oracle protocol and conditional prediction market (PM) proposed by Paul Sztorc (Truthcoin) and designed as a Bitcoin sidechain.
The protocol targets a primary use within the voting system by reducing the problems of multi-factor decision making among a group of people coming to a consensus on a decision
It also provides rich information at low fees and prevents information from being tampered with by other parties

Information source http://btc-investor.net/bitcoin-hivemind/

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Henri Cartier
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July 10, 2020, 12:04:47 PM
 #2

Nice information. Thanks for sharing this!

A small suggestion, it would be good if you explain with examples so that everyone can understand better.

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July 10, 2020, 01:19:51 PM
 #3

Nice information. Thanks for sharing this!

A small suggestion, it would be good if you explain with examples so that everyone can understand better.
I heard about this rootstock, there is a project before called temco that runs on their network rsk, but eventually transfer back to ethereum probably due to some technicalities on the application of temco. I see that it has similarity on typical ethereum network where rootstock support smart contract application. This creation is a trial method whether bitcoin can be a good smart contract type of blockchain, like most projects now.

What good about rsk is they are compatible to eth network and even evm. But not sure what happen to their development now.
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July 30, 2020, 12:58:44 PM
 #4

~
note that sidechains are independent of the main blockchain.


Is this good?  Ardor also uses sidechains technique but its "childchains" depend on the main chain. While childchains move the values  the main chain takes care of the transactions  validation and the whole net security. Such  responsibilities assignment  allows the use of predefined modules when constructing the  given childchain. Is that possible in the case of bitcoin sidechains?

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