The Rise of Sidechains: A Promising Area of Blockchain Technology

One of the most important innovations to follow right now is the rise of sidechains, a promising area of blockchain technology

The world of cryptocurrencies moves fast. New coins, chains, and technologies emerge constantly, so it is easy to feel overwhelmed these days. Yet, one of the most important innovations to follow right now is the rise of sidechains, a promising area of blockchain technology set to revolutionize blockchain scalability and interoperability.

Sidechains are central in the decade-long fight to scale blockchains and improve interoperability between them. In this article, we will break down what sidechains are, how they work, how you can use them effectively, and dive into a few of the most popular sidechains available today.

What Is a Sidechain?

The largest and most popular crypto networks, namely Bitcoin and Ethereum, often face issues like high fees and slow transaction times, largely because they sacrifice scalability for decentralization and security. Other networks, such as Solana or Binance Smart Chain (BSC), use much more centralized consensus mechanisms to speed up transactions and keep fees down.

A sidechain is a separate blockchain that runs in parallel to the main one (often referred to as the mainchain). The sidechain is connected to the main blockchain through a two-way bridge, which allows assets to move easily between the two.

Even though it might sound like it, sidechains aren’t just clones of their mainchains. Sidechains operate independently and have their own consensus mechanisms, rules, and validators. This independent operation is what makes them so powerful. They allow developers to experiment, scale, and even add features without messing with the core blockchain.

Why Do Sidechains Exist?

Sidechains were created to solve the limitations of major blockchains like Bitcoin and Ethereum. The networks can be expensive and slow when busy, and sidechains offer the perfect solution to this problem. They offer ways to run smart contracts, scale transactions, and/or support custom applications with low fees and fast transactions, all without clogging up the mainchain.

You can think of them as specialized highways that connect to the main freeway. They help relieve traffic and allow for faster travel, and they can be tailored to different kinds of vehicles. However, instead of cars and trucks, sidechains host dApps, games, DeFi tools, and more.

How Sidechains Work

At a high level, sidechains function by connecting to the main blockchain using a two-way bridge. The two-way bridge works like any other crypto bridge, allowing users to lock up assets on the mainchain and then unlock the corresponding amount on the sidechain. Later, they can also reverse the process and move the funds back.

Let’s say that you decided to move ETH from Ethereum to a sidechain like Polygon PoS. Here’s what you would need to do.

You would navigate to Polygon’s official bridge and deposit your ETH into its smart contract. The same amount would then appear on Polygon as wrapped ETH. Note that transaction fees on Polygon are paid with Polygon (MATIC), so make sure to transfer at least a few MATIC tokens as well. Once the transaction finishes, you can now use the wrapped ETH in apps running on Polygon, which is often much faster and cheaper. Once you are done, you can simply move your