Sidechain
A sidechain is a blockchain-based technology that allows for the transfer and conversion of digital assets between different blockchains. The concept was first proposed in 2014 by Adam Back, Matt Corallo, Luke Dashjr, and Mark Friedenbach as a way to improve on the scalability issues that had arisen with Bitcoin’s growing popularity. Sidechains are designed to offer more flexibility than traditional blockchains and allow for new features such as smart contracts or atomic swaps without compromising security or decentralization.
Unlike traditional blockchains which use one consensus algorithm (often proof-of-work), sidechains can use any combination of consensus algorithms to provide faster transaction times and greater privacy. This is because transactions on each chain are separate from those on other chains; thus, they don’t need to wait for all nodes in the network to reach consensus before processing payments.
In addition to offering improved scalability and features, sidechains also enable cross-chain communication between different types of blockchains. For example, an Ethereum smart contract could be used to facilitate transfers between two Bitcoin addresses without requiring users to convert their funds into another asset type like Ether or Litecoin first. This would make it much easier for people with multiple cryptocurrencies at their disposal to quickly move money around while minimizing risk due to volatile prices or large transaction fees associated with some exchanges.
Finally, sidechains may also reduce costs associated with developing custom applications since developers no longer have to write code from scratch when deploying them across different networks; instead they can rapidly port existing ones over using compatible programming languages such as Solidity (for Ethereum) or Simplicity (for BitShares). Additionally, this makes it possible for developers who only possess expertise in one particular language/platform/protocol stack but wish build something on top of another platform – allowing them access a larger pool of potential customers within the same ecosystem!
