As there are many terms to such a large project like Elastos and the Cyber Republic, we’ve decided to build a growing glossary of terms that can help the less technical understand better what the tech means and the impact it could have. This week we’re focusing on the term: Sidechain.
A sidechain is a discrete sub-blockchain linked to the main chain which enriches the capabilities of the main chain. Assets are exchanged between the main chain and sidechain at a predetermined rate, but because calculations can be solved on separate chains simultaneously, capacity is greatly increased. For instance, in other blockchains utilizing sidechains a user on a parent chain sends their tokens to an output address where the tokens are locked. A corresponding amount of tokens is released on the sidechain and the user is then able to utilize the tokens on the sidechain in several transactions before returning the sidechain tokens back to the main chain via the same locking mechanism. Elastos’ mechanism utilizes the same private key across mainchain and sidechains, and transfers between them are facilitated through arbitrators–the 36 Supernodes which run one node of every single chain: main chain, DID sidechain, Token sidechain, and so on so forth. Sidechains are responsible for their own security. If there is a problem in the sidechain or mainchain, they do not necessarily impact each other.
Think of a sidechain as a local road parallel to a highway. Perhaps this local road has several more intersections and stop signs and traffic moving in different directions. If these intersections and stop signs were put on the highway, things would easily slow down to full-blown traffic jam–maybe even the majority of the time. By adding these local roads parallel to the highway, it allows specific traffic to exit and get to particular places at particular times, which keeps the highway itself uncongested and freely moving.
Elastos uses a number of sidechains, each specifically designed for one type of traffic. DID sidechain just for issuing decentralized IDs and storing information for each DID. Token sidechain which has the sole purpose of issuing fungible and non-fungible tokens. Ethereum sidechain to mimic anything that Ethereum can do through smart contract or function. NEO sidechain to mimic NEO’s smart contracts and functions.