Steemit Crypto Academy Contest / S14W3 -Sidechains

Assalamualaikum everyone!

Welcome to the post. Hopefully, all of you will be doing well and enjoying the time with the grace and blessings of Almighty Allah. Today, I'm here to be a part of the week 3 contest in our beloved SteemitCryptoAcademy. The topic of discussion for this week is very much important, Sidechains. So, let's start the fun without any wastage of time.

What is a sidechain in the context of blockchains and how does it work to improve the scalability of a blockchain network?

Sidechain is a very common term used in the cryptocurrency word. As the name of the term reflects by itself that the side chain is actually a blockchain which is separate/beside the other chain. A sidechain is a distinct, independent blockchain network that operates alongside the main blockchain (also known as the "parent chain").

These two chains are linked by a two-way "peg," which allows for the secure movement of assets between them. The main blockchain can increase its scalability without compromising its security or decentralization by shifting transactions and operations them on the sidechain.

Consider the main blockchain to be a congested highway jam-packed with traffic. Transactions reflecting diverse activities produce high load on the system and require time to process. Sidechains function as parallel roadways, diverting traffic away from the main route. They have their own consensus methods as well as independent mechanism to process the transactions.

The main chain and the sidechain are linked via a secure bridge. This bridge serves as a medium for transferring assets (cryptocurrencies, tokens, and so on) between the two networks. When assets are moved to the sidechain, they are "locked" on the main chain and "unlocked" when transferred back. This builds trust and avoids double spending of cryptos.

Because of their autonomous operations and less separate consensus methods, sidechains can process transactions significantly faster than the main chain. This lowers transaction fees and confirmation times as well, resulting in a more pleasant user experience. For example, if the main chain can process 10 transactions per second, the sidechain may handle 100 or 1000, greatly increasing the system's overall capacity.

There are number of examples of the sidechains in the crypto space including, Liquid is a Bitcoin sidechain that focuses on quick and secure transactions. RSK is an Ethereum sidechain that enables smart contracts with greater privacy and security. Polygon is a sidechain network that provides scalability solutions for a variety of Ethereum-based applications.

What are the main differences between a sidechain and the main blockchain, and how do these differences help solve scalability issues?

Well, there are some differences between the sidechains and the main chains. So, let's discuss some of the major differences between these two types of chains.

• Independence of the Chain:

The most important difference is that the mainchain use well-established security and consensus techniques like as Proof-of-Work (PoW) or Proof-of-Stake (PoS). Security and decentralization are given preference over transaction speed.

While on the other hand, a sidechain is an independent blockchain with its own consensus process, commonly Proof-of-Authority (PoA) or delegated PoS, is responsible for speed and throughput. To some extent, speed and scalability can take preference over decentralization.

• Processing Transactions:

Mainchain directly processes transactions, resulting in congestion and high transaction fees during peak hours. Also, it can only handle a limited number of transactions per second (TPS). While, sidechain transactions are offloaded off the mainchain, reducing congestion and fees. They can withstand much greater TPS, frequently in the hundreds or thousands.

• Adaptability:

Mainchain changes are implemented quite slowly due to consensus requirements and probable network interruptions. They are less open to experimenting with new features. While the sidechains allow faster and easier testing and deployment of new features and functionalities without interfering with the mainchain. Thus they serves as a testing ground for new ideas and scaling solutions.

• Security:

Mainchain is generally regarded as more secure because to its long track record, broader validator set, and powerful consensus methods. While, security on the sidechain is dependent on its own validator set and implementation. The bridge that connects the two chains creates a possible point of failure.

• Decentralization:

Because of its huge and diverse validator network, the mainchain is typically more decentralized. While on the other hand, depending on the validator set and consensus mechanism of sidechain, it can have variable degrees of decentralization. Less decentralized sidechains may provide faster throughput but at the expense of security.

• The most important thing is that by processing transactions on the sidechain, the mainchain may focus on network security and state validation. This minimizes network congestion while increasing total network capacity to validate the transactions.

• Another important thing is that the sidechains can use faster and more efficient consensus techniques, allowing for faster transaction processing and confirmation times as well.

• Moreover, the smaller block sizes and easier validation on the sidechain result in lower transaction fees and faster processing.

• Sidechains serve as a testing ground for new features and scalability solutions, which can then be adopted by the mainchain if successful.

Are there any concrete examples of successful implementations of sidechains in blockchains, especially in the context of the Steemit platform?

As I have discussed that sidechains can be strong scalability tools, their success is heavily dependent on individual use cases and implementation. There are number of successful implementation of the sidechains in the cryptocurrency world. Some popular are as below;

• Liquid:

Liquid is actually a Bitcoin sidechain that allows for rapid and secure transactions. Because of its speed and enhanced privacy features, Liquid has gained substantial popularity with exchanges and institutions.

• Polygon:

Another successful example is Polygon which is actually interconnected network of sidechains that provides scaling options for Ethereum-based applications. Polygon has a slew of decentralized financial (DeFi) and gaming businesses that take advantage of its quick and low-cost transactions.

• RSK:

RSK is another successful example of the sidechain. RSK is actually an Ethereum sidechain focusing on smart contract security and privacy. RSK provides a framework for the deployment of secure secret transactions and decentralized applications as well.

Talking about Steem Blockchain and Sidechains...

As far I know, there is no successful implementation of the sidechain on the Steem blockchain at this exact time. But, there are some proposals for the implementation of the sidechains in the past.

1. Steem Smart Contracts:

This is one proposal of sidechain which provides previously unavailable smart contract capability on the Steem network. It helps developers to construct and deploy decentralized apps (dApps) with capabilities such as secure transactions, token creation, and data storage using node.js and a Javascript virtual environment.

According to this concept, smart contract capabilities allows for the development of dApps on Steem, broadening its use beyond social media. When compared to the main Steem chain, the sidechain offers much faster transaction speeds. It offloads the main chain's processing workload, potentially boosting overall network scalability.

2. Steem Sidechain (WIP):

Another important proposal that aims to implement the sidechain on the Steem blockchain was the Steem Sidechain (WIP) project. It aims to address scalability and transaction costs in Steem. It is its own blockchain, with its own consensus method and transaction fees.

Both of examples are not implemented yet. However, they highlight how sidechains have the ability to improve the Steem blockchain by addressing scalability and increasing its capabilities.

How could sidechains be used to diversify functionality on the Steemit platform beyond simple cryptocurrency transactions?

From the above discussion, it can easily be noticed that the sidechains provide potential opportunities to expand the functionality of the Steemit platform beyond simple cryptocurrency transactions, allowing for a broader range of services and use cases. Here are some examples of potential applications:

1. Decentralized Applications (dApps):

Consider dApps that provide private messaging, collaborative content production, or reputation systems separate from the main Steem chain. Sidechains might offer prediction markets on a variety of topics, encouraging community interaction and potentially generating rewards for dApp creators. Sidechains might enable decentralized games and interactive experiences, with Steem coins used for in-game purchases and prizes as well.

2. Scalability and Speed:

Another important thing is that by offloading small transactions like commenting, upvotes, or token transfers to a sidechain would dramatically enhance Steemit's transaction speed and capacity. Sidechains with lower transaction fees may encourage users to do smaller transactions, enhancing platform activity and engagement. Using Steem tokens, sidechains could enable faster and cheaper cross-border payments, thereby drawing new users and expanding Steemit's reach.

3. Better Security and Privacy:

Sidechains could enable anonymous transactions or dApps with data privacy protections, attarcting to more and more users. Before incorporating new functionality or controversial features into the main Steem chain, testing them on a sidechain could lessen risks and allow for community feedback. Certain sidechain features may also allow for enhanced fraud detection and prevention systems.

4. Interoperability and Cross-Chain Applications:

Sidechains may operate as bridges, allowing smooth interaction between Steem and other blockchains, opening up new use cases and increasing Steem's liquidity and reach. Developers might also create dApps that use functionality from both the Steem blockchain and other blockchains, resulting in unique and hybrid experiences. Sidechains could enable DeFi applications on Steem assets such as lending, borrowing, or yield farming, thereby attracting new user on the platform.

How could sidechains help attract new users and developers to the Steemit platform by offering improved functionality and reduced transaction costs?

First of all, sidechains can unlock the power of Steemit's decentralized apps (dApps), opening up new possibilities beyond simple social media interactions. Consider prediction markets, decentralized games, community-driven reputation systems, and microtasking platforms that are all potentially linked into the Steem ecosystem. This expanded set of features has the potential to both engage existing users and attract new ones looking for creative and interactive experiences.

Secondly, sidechains can handle high-frequency transactions like tipping, upvotes, and micropayments significantly faster and cheaper than the main Steem chain. This improved user experience encourages more platform activity and engagement, particularly among usual users who may avoid frequent transactions due to delayed processing or expensive costs.

Another important thing is that the sidechains provide a fertile field for developers to construct unique dApps and functionality that leverage the Steem coin and existing user base. This draws competent developers seeking new challenges and opportunities inside an established ecosystem like Steemit.

Another advantage to the developers is that the sidechains provide more flexibility for developers to experiment with multiple consensus techniques, smart contract languages, and governance frameworks. This attracts developers that appreciate technical flexibility and the capacity to create innovative solutions outside of the constraints of the main chain.

So, these are some projected possible gains that can be obtained by the Steem blockchain after the implementation of the sidechains. This thing will increase the attraction of the general users, investors, as well as, more and more developers to work on the blockchain.

Conclusions

Sidechains are actually such chains which are built on a parent chain in order to gain various benefits. The most important thing is to gain more stability and high scalability of the main chain as most of the transactions load is transferred to the sidechain and hence the low load on parent chain can be processed easily hence improving the scalability. The implementation of sidechain on Steem platform will also lead to many potential gains and hence attract more and more users.

I would like to invite my friends @suboohi, @aaliarubab, @artist1111, @shabbir86 and @yancar to be a part of this amazing contest.*