Bitcoin has revolutionized the way we think about money, but as it grows, so do its challenges. These can include slow transactions, overcrowding, a lack of specialization, and a myriad of others. To address these issues, sidechains have emerged as a plausible solution. Let's explore what sidechains are, why we need them, and how they can be used, using three simple analogies.
The Need for Sidechains
The most obvious challenge to Bitcoin is its scalability. As Bitcoin's popularity increases, so does the number of transactions. Sidechains help manage this load by providing alternative routes for transactions, reducing traffic on the main network.
Another issue with Bitcoin is flexibility. Different types of transactions may require different handling, which Bitcoin may not provide. Sidechains can be tailored for specific use cases, offering specialized solutions without weighing down the main network with difficult transactions.
Sidechains help with cost efficiency. By offloading some of the traffic from the main network, sidechains could reduce transaction fees and speed up processing times, ultimately making the system more cost-effective, and efficient, for users.
With these types of solutions to such common Bitcoin challenges, sidechains will enhance user experience. They could make complex activities like minting and transferring assets easier and more affordable for the average user and increase the capabilities of the main chain. To further explain this, let's look at some analogies that describe the benefits and use cases of sidechains.
The Library System
Imagine Bitcoin as a huge and popular library in a major city. This library has an extensive collection of books (transactions), and it's always crowded. To improve the experience, the city opens several neighborhood libraries (sidechains) nearby. These libraries are connected to the main library and can lend out some of the same books, while providing quicker service to the neighborhood residents.
Books can move between the central and neighborhood libraries, ensuring a good selection at all locations. These new libraries help reduce the crowding at the central library, making it easier and faster for people to access the books they want. Like sidechains, the neighborhood libraries support the central library (Bitcoin), providing a more seamless experience of the library system for everyone.
The Amusement Park
Think of Bitcoin as a popular amusement park, crowded with visitors who all want to enjoy the same great rides and attractions. Because it's so popular, the lines are long, and the park is less enjoyable. To help with this, the amusement park builds additional parks (sidechains) around the main park. These new parks have some of the same great rides but also introduce new attractions, drawing in different types of visitors.
These additional parks attract more visitors overall, not just from the main park but also from outside. They provide new experiences and more options, making the whole amusement park network more appealing and accessible to all kinds of people. The side parks complement the main park, expanding its reach and enhancing the visitor experience without simply offloading traffic. In the same way, sidechains not only reduce overcrowding from the main chain, like in the library system example, but they also add to the user experience, offering more options for unique applications.
The Craft Market
Next, think of Bitcoin as a famous craft market. This market is known for its unique and high-quality goods (transactions), attracting many customers. To accommodate different kinds of crafts and customers, several additional and smaller markets (sidechains) are set up around the city. These markets offer specialized crafts that may not be available at the central market, attracting new kinds of shoppers.
Goods can move between the central market and these additional markets, providing diverse selections at all locations. These new markets help to introduce different products and attract various customers, adding more opportunities within the market scene. Just like in the previous analogies, the side markets support the central market by growing its customer base and by improving the shopping experience for everyone.
How Can Sidechains Be Used?
Knowing why sidechains are needed and how they work, let’s look at how they should be used by furthering our analogies.
Just like additional parks or smaller markets, sidechains can introduce new features and experiences that attract different types of users, expanding the overall user base and opportunities. These new features, or other types of transactions, might need specific materials, or security measures. Sidechains can be customized to handle these needs without complicating the main Bitcoin network, like smaller craft markets can be made for specific crafts without overcrowding the main market. Also, developers can use these sidechains, or customers can try out new markets, to test new features or improvements without risking the stability of the main network. If successful, these innovations can then be integrated into the main system, like a unique craft store could be added to the main market.
Looking Ahead with Anduro Sidechains
Anduro, showcases the potential of sidechains, especially within the Bitcoin ecosystem. Anduro, as an ecosystem of sidechains, is specifically designed to cater to real world applications such as loyalty programs, payment apps, asset tokenization and many other use cases that currently cannot be done on Bitcoin mainchain.
These applications leverage the security of Bitcoin without additional traffic. Anduro enhances the current blockchain with specialized transactions and allows for experimentation and scalability without compromising the integrity of the mainchain. Anduro was built to add utility to the Bitcoin ecosystem.
