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Anyone who has been following Bitcoin will be familiar with two concepts: “tree chains” and “side chains” and there is some debate about which one is more appropriate to add to the Bitcoin protocol.
First of all, it should be clear that the biggest reason to develop tree chain and side chain technology is the current scalability of Bitcoin. As the total number of transactions continues to increase, the bandwidth and storage required by the individual miner will swell to unsustainable levels. So some way to break up the blockchain is urgently needed to reduce the burden on independent miners.
Knowing the reason, let’s talk about side chain today.
1
What is side chain?
Side chain is a new mechanism. This mechanism allows tokens or other digital assets to be safely transferred from one blockchain to another, and back again if necessary. He has great potential to expand existing blockchains.
A side chain is a separate blockchain that is linked to the parent chain through a method called bidirectional anchoring, which allows the parent chain and the side chain to swap assets at a predetermined rate. In general, the original blockchain is called the “main chain,” and additional chains are called “side chains,” but there are special cases, such as Ardor, where “side chains” are called “child chains.”
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Bidirectional anchoring is the core principle of side chain implementation. When bitcoin is transferred between the main chain and the side chain, the “transfer” is actually an illusion. The reality is that bitcoin is not actually transferred, but is temporarily locked on the Bitcoin blockchain, while an equal number of equivalent tokens are unlocked on the side chain. When the same amount of token is locked again on the side chain, the original Bitcoin is unlocked. This is essentially what bidirectional hooks are supposed to do.
The complete steps of the process are as follows:
1. When a user wants to transfer bitcoin to a side chain, a transaction is first created in the main chain, and the bitcoin to be transferred is sent to a special output. Note: These bitcoins are locked on the main chain, not actually transferred to the side chain. 2. Wait for a confirmation period so that the above transaction can get sufficient work confirmation. 3. When the user creates a transaction to extract bitcoin from the side chain, it is required to specify the output of the above main chain locked in the input of this transaction, and provide sufficient SPV proof (to prove that these are indeed locked bitcoin). 4. Wait for a competitive period to prevent double spending attacks. 5. Bitcoin circulates freely on the side chain. 6, when the user wants to return bitcoin to the main chain, take a similar reverse operation.
2
Side chain safety issues
The side chain is for its own safety only. If there is not enough ore to protect the side chain, it can easily be invaded. Since each side chain is independent, if it is hacked or compromised, the damage will only occur in that chain and will not affect the main chain. Conversely, if the main chain is attacked or damaged, the side chain can still function, but the anchoring loses its meaning.
Side chains should have their own miners. These miners can be incentived to mine two separate cryptocurrencies based on the same algorithm at the same time by “merging mining.”
3
What are the existing side chain platforms?
1. The RSK (Rookstock)
RSK has created an open source side chain for its side chain called Ginger, which is a side chain for Bitcoin. The goal is to empower bitcoin and make it more competitive by enabling smart contracts, instant payments and greater scalability. RSK is an extension of the Bitcoin ecosystem. It acts as a side chain to bitcoin, anchoring it in both ways and rewarding bitcoin miners by combining mining.
2. Ardor
Ardor’s blockchain is designed specifically for commercial transactions, and it uses PoS proof. Ardor calls its side chains “sub-chains”, which are closely linked to the parent chain because all transactions are processed and guaranteed by the parent chain, so security is greatly improved. And in order to maintain stability and control the growth of the blockchain, Ardor basically devolves power to the first chain.
Other well-known side chains include BTC Relay, which is based on bitcoin network, and non-bitcoin side chains such as Lisk and Asch in China.
conclusion
Side chains are intended to achieve the goal of the financial ecosystem of cryptocurrencies in a converged manner, rather than excluding existing systems like other digital assets.
It allows cryptocurrencies to interact with each other, adding flexibility and allowing developers to test or update their software before pushing them onto the main chain. Traditional banking services, such as publishing and tracking share ownership, can be tested on the side chain before moving to the main chain.
The side chain provides a mechanism for testing and upgrading without hindrance.
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