First, a little background is required. There is a smart contract on Ethereum MainNet at 0xb6ed7644c69416d67b522e20bc294a9a9b405b31 which, every 15 minutes, PoW miners are submitting solution nonces to. They are trying to mint a certain token, but that does not matter for this purpose. When a ‘token miner’ is trying to mine for these tokens, the nonce is actually a huge 256 bit uint (32 bytes) and yet only about 8 bytes or less are needed to be randomized in order to find solutions. This means that the miners can put ANY DATA in the other 24 bytes that they want. This data will be immortalized into the Ethereum Mainnet and the people who determine what this data is are the people with the most hashrates. If you control 5% of the hashrate, on average you will determine a random 5% of the ‘nonce data’ of those mints.

Here is an example of a mint and input [0] is the nonce:

For this example let us assume there are 10 nodes (there could be infinite), and these nodes are all 1) mining this token and 2) they are acting as validators/collators for the Inferno Sidechain. The Inferno Sidechain is an Ethereum Sidechain using Geth but it is modified so it has ‘Megablocks’ which last approximately 10 minutes, so quite slow. (There is the ability to also have many short miniblocks if validators were assigned decentralized authority by other means as well, this will be researched.) The validators are collecting transactions and propogating them in the mempool with eachother until a validator mines a token nonce and includes the hashroot of the sidechain Megablock inside the nonce for that mint (input[0] above.) Now, the entire Inferno Sidechain network inspects the Ethereum Mainnet and sees that those sidechain tx composing that Megablock are validated and immortalized in the Ethereum blockchain. Now, consensus has been reached and there is a single sidechain fork which is the ‘true’ chain.

This continues to occur, and now the Inferno Sidechain is an Ethereum Sidechain which has the security of the entire Ethereum blockchain and whose authority is determined purely by PoW SHA3 mining.

Continued: https://medium.com/@admazzola/building-a-stateless-ethereum-sidechain-9694d1323009