Sidechains are secondary blockchains which are connected to the main blockchain, also known as the main chain. Commonly, sidechains are connected to the main chain through two-way pegs, a mechanism which allows the bidirectional transfer of native digital currencies between the chains.

In a way, sidechains allow users to “move” Bitcoin through blockchains, where they’re subject to different protocol rules, which allows greater transaction capacity, more confidentiality, enhanced privacy protection in Blockchain.

Sidechains can have a different protocol or consensus algorithm from the main chain, which can provide benefits when it comes to flexibility & functionalities.

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The automatic transfer of funds through a #sidechain contract should not be interpreted as a deliberate act of currency creation or as a regulatory concern. Instead, it aligns with the inherent nature of decentralized and automated blockchain processes.