Sivuketjut

Sivuketjut is the Finnish term commonly used to refer to sidechains, which are secondary blockchains connected to a main blockchain network. Sidechains are designed to extend functionality, scalability, or privacy without altering the core rules of the primary chain. They allow assets or data to move between chains through locking and pegging mechanisms or other bridging methods, while preserving the security properties of the main network.

In a typical setup, tokens or digital assets are transferred from the main chain to a sidechain and are locked on the main chain. The sidechain then operates under its own consensus rules and can implement features not available on the main chain, such as faster transaction finality, different privacy models, or smart contract capabilities. Transfers back to the main chain usually require a verification or two-way peg process. The security of a sidechain can depend on its own validators, federations, or other governance arrangements, in addition to the security of the main chain.

Applications of sivuketjut include scalability solutions, experimentation with new protocols, enhanced privacy, and improved interoperability between different networks. Well-known examples include Bitcoin sidechains such as Liquid Network, which aims to enable faster, private transfers, and RSK, which adds smart contract functionality to Bitcoin. Ethereum-related sidechains and multi-chain ecosystems like Polygon are used to run compatible smart contracts and decentralized applications in parallel with the main Ethereum chain.

Key considerations for sivuketjut involve security trade-offs, bridge trust assumptions, potential centralization risks, and regulatory considerations. While they offer practical benefits, sidechains require careful design and governance to mitigate cross-chain vulnerabilities and maintain user confidence.