Side Chains and State Channels on Cardano
In the world of blockchain technology, a “side chain” is when you link one blockchain network to another in a parent-child relationship. The blockchain designated as the “child” is the side chain. The parent is typically referred to as the “main chain,” “layer 1”, or “base chain”. Side chains can provide functionality that the main chain does not, such as more speed, potentially cheaper or free transactions, or running DApps from originally made for other blockchain networks. It’s like when your 16-year-old is designated to handle all the computer stuff in the home because mom and dad can’t keep up with the constantly changing technologies and interfaces.
On the Bitcoin network, there is a popular side chain called Liquid. Liquid offers stronger security and faster processing for Bitcoin transactions. All Liquid Bitcoin is linked to actual Bitcoin on the Bitcoin mainnet, but Liquid Bitcoin can move around on the side chain, changing hands many many times without having to interact with the slower Bitcoin mainnet. On Liquid, these transactions are not only faster, but cheaper. When a user is ready,…
