The whole world is going through the blockchain revolution. But wait…is this really what we dreamed of? Present transaction rates of bitcoin and ethereum are so low that we can’t imagine to support even a single game, forget about the financial transactions, IOT etc.

Here is where sidechain comes to the rescue…

sidechains to the rescue

Today we are going to explore some of the prominent sidechain projects. And if you are interested in state channels and how they are different from side chains, then you can checkout these.

Now, let’s get started.

Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide. These smart contracts are incentivized to continue operation autonomously via network transaction fees, which is ultimately reliant upon the underlying blockchain (e.g. Ethereum) to enforce transactional state transitions.

Plasma proposes a method for decentralized autonomous applications to scale to process not only financial activity, but also construct economic incentives for globally persistent data services, which may produce an alternative to centralized server farms.

Plasma is composed of two key parts of the design: Reframing all blockchain computation into a set of MapReduce functions, and an optional method to do Proof-of-Stake token bonding on top of existing blockchains with the understanding that the Nakamoto Consensus incentives discourage block withholding.

This construction is achieved by composing smart contracts on the main blockchain using fraud proofs whereby state transitions can be enforced on a parent blockchain. We compose blockchains into a tree hierarchy, and treat each as an individual branch blockchain with enforced blockchain history and MapReducable computation committed into merkle proofs. By framing one’s ledger entry into a child blockchain which is enforced by the parent chain, one can enable incredible scale with minimized trust (presuming root blockchain availability and correctness).

The greatest complexity around global enforcement of non-global data revolves around data availability and block withholding attacks, Plasma has mitigations for this issue by allowing for exiting faulty chains while also creating mechanisms to incentivize and enforce continued correct execution of data.

As only merkleized commitments are broadcast periodically to the root blockchain (i.e. Ethereum) during non-faulty states, this can allow for incredibly scalable, low cost transactions and computation. Plasma enables persistently operating decentralized applications at high scale.

Plasma github | Plasma reddit

RSK is the first open-source smart contract platform with a 2-way peg to Bitcoin that also rewards the Bitcoin miners via merge-mining, allowing them to actively participate in the Smart Contract revolution. RSK goal is to add value and functionality to the Bitcoin ecosystem by enabling smart-contracts, near instant payments and higher-scalability.

Features

Bitcoin Friendly: The lack of turing-complete smart-contracts capabilities may become an obstacle to Bitcoin´s growth to it´s full potential. RSK provides the missing technical needs, as a blockchain with a 2-way peg to Bitcoin. As RSK does not mint, nor has pre-mined coins, then it has no speculative value and does not compete with Bitcoin.

The lack of turing-complete smart-contracts capabilities may become an obstacle to Bitcoin´s growth to it´s full potential. provides the missing technical needs, as a blockchain with a 2-way peg to Bitcoin. As does not mint, nor has pre-mined coins, then it has no speculative value and does not compete with Bitcoin. Security: RSK´s blockchain is secured by merge-mining, which means that they can achieve the same security as Bitcoin in terms of double-spend prevention and settlement finality. The 2way peg security will first rely in a federation holding custody of bitcoins, and later switch to an automatic peg, when the community accepts the security trade-offs of the automatic peg.

blockchain is secured by merge-mining, which means that they can achieve the same security as Bitcoin in terms of double-spend prevention and settlement finality. The 2way peg security will first rely in a federation holding custody of bitcoins, and later switch to an automatic peg, when the community accepts the security trade-offs of the automatic peg. Scalability: RSK can scale far beyond Bitcoin in its current state. RSK scales to 100 transaction per second without sacrificing decentralization and reducing storage and bandwidth usage using probabilistic verification and fraud proofs, as well as blockchain sharding techniques.

can scale far beyond Bitcoin in its current state. scales to 100 transaction per second without sacrificing decentralization and reducing storage and bandwidth usage using probabilistic verification and fraud proofs, as well as blockchain sharding techniques. Instant Payments: Since the creation of Bitcoin there has been a race for faster transaction confirmations. Instant payments allow new use cases, such as retail store payments, and transactions in online games. RSK carefully chosen parameters and new theoretical protocols (such as DECOR+GHOST) allow creating blocks at 10 seconds average interval, with low stale block rate, and no additional centralization incentives.

Rootstock github | Rootstock telegram | Rootstock reddit

Elements Alpha functions as a sidechain to Bitcoin’s testnet, though the peg mechanism currently works through a centralized protocol adapter, as described in the Sidechains whitepaper. It relies on an auditable federation of signers to manage the testnet coins transferred into the sidechain via the “Deterministic Pegs” Element, and to produce blocks via the “Signed Blocks” Element. This makes it possible to immediately explore the new chain’s possibilities, using different security trade-offs. They plan to, in a later release, upgrade the protocol adapter to support fully decentralized merge-mining of the sidechain, and ultimately to phase in the full 2-way peg mechanism.

Liquid is the first commercial sidechain by Blockstream. It enables instant movement of funds between exchanges, without waiting for the delay of confirmation in the Bitcoin blockchain. It is available to users of participating Bitcoin exchanges.

Loom Network DAppChains are built for Games and Social Apps. Token-based karma, Ethereum-based crypto-collectibles, all based on forkable, decentralized, and human-readable blockchain rulesets.

Games: Build games that truly cannot be built without the blockchain: provably scarce items, tradable tokens, eternal worlds, and multi-game-spanning universes.

Build games that truly cannot be built without the blockchain: provably scarce items, tradable tokens, eternal worlds, and multi-game-spanning universes. Social: Build social applications not driven by advertising. Monetizable via karma tokens, expandable via multiple-client apps, minimization of trust, and more.

Loom github | Loom telegram | Loom reddit

POA Network is an open Ethereum sidechain with Proof of Authority consensus, reached by independent validators. We are building a public network for smart contracts that combines speed, security, and cost efficiency.

Features

5 seconds block time: The network is fully compatible with Ethereum protocol. PoA consensus mechanism, however, allows much faster block time.

The network is fully compatible with Ethereum protocol. PoA consensus mechanism, however, allows much faster block time. No mining: Creating blocks in a PoA network does not require significant computational resources, as in Proof of Work based blockchains.

Creating blocks in a PoA network does not require significant computational resources, as in Proof of Work based blockchains. Built-in governance: Validators vote for adding or removing validators using Governance DApp. Thus, the network supports voting at the consensus level.

Validators vote for adding or removing validators using Governance DApp. Thus, the network supports voting at the consensus level. Legally recognizable hard fork decisions: All validators are required to sign a legal agreement with the network. Hard fork decisions are legally binding.

All validators are required to sign a legal agreement with the network. Hard fork decisions are legally binding. Model for hybrid networks: POA Network model can be used as a blueprint to quickly launch open on-premise networks with intrinsic value.

POA Network model can be used as a blueprint to quickly launch open on-premise networks with intrinsic value. Supported DApps: The network supports a broad range of “proof of identity” DApps and integrates them to proof the identity of validators.

POA github | POA telegram | POA reddit

7. Bitcoin Extended

A heavier, less decentralized chain for higher-throughput, cheaper Bitcoin transactions. Aims for simplicity and modularity; Bitcoin Core + BIP 101.

P2P Oracle System and Digital Marketplace. This project aims to revolutionize the way information is created and diffuses through society. As a side-effect, it creates efficiencies in capital markets, destroys scams, and creates certain types of digital insurance markets.

Hivemind github

MimbleWimble is a privacy and fungibility focused cryptocoin transaction structure proposal.Main differences to bitcoin: no scripts, cross-block mergeable transactions, confidential account balances.

Current development is heading towards having an altcoin instead of a bitcoin layer/side-chain for now.

MimbleWimble github | MimbleWimble reddit

As open source, protocol-level technology, developers can use Elements to extend the functionality of Bitcoin and explore new applications of the Blockchain. Using Elements you can also create your own sidechain easily.

Features

Confidential transactions: The Confidential Transactions Element keeps the amounts transferred in a blockchain transaction visible only to participants in the transaction.

The Confidential Transactions Element keeps the amounts transferred in a blockchain transaction visible only to participants in the transaction. Segregated Witness: The Segregated Witness Element eliminates all known forms of transaction malleability, and allows significant blockchain pruning optimizations.

The Segregated Witness Element eliminates all known forms of transaction malleability, and allows significant blockchain pruning optimizations. The Periodic Table: Elements are open-source bundles that can be used alongside one another to construct new, novel applications using the Bitcoin blockchain.

Elements github

A re-design of Namecoin as a sidechain. Has the potential to greately improve internet safety, privacy, and reliability.

Codex github