Sidechains serve as auxiliary networks connected to primary chains like Bitcoin, enabling asset transfers and feature experimentation without hampering the main network's performance or integrity.
The two-way peg mechanism is crucial to sidechains, allowing for locked assets on the main blockchain to be mirrored on the sidechain, maintaining a stable overall supply.
By utilizing different consensus mechanisms, sidechains can introduce faster transaction processes and lower fees, enhancing the scalability and functionality of existing blockchain systems.
A sidechain’s level of decentralization can fluctuate based on its connection to the main chain, presenting opportunities for unique operational models such as those seen in Directed Acyclic Graph architectures.
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