Distributed database that is used to maintain a continuously growing list of records, called blocks.
In order to support the Bitcoin scaling agreement, the Blockchain Association of Canada has started a sidechain project: Liquid Networks. The project is founded by Samson Mow of Blockstream and Joseph Weinberg of Paycase, based in Ottawa.
The Liquid Network, a sidechain network, is created to optimize transactions with agility and swiftness.
Sidechains like Liquid Networks have the capabilities to perform real-time audits while offering a secure protocol with an option of impenetrable, secure tokens all of which can be comfortably used over the open internet.
Optimized financial transactions
Sidechains allow for new innovations in security models and features, plus the added benefit of faster and more cost efficient transactions — if more businesses were utilizing sidechains for cases involving recurring transactions, they would take some pressure off the main Bitcoin blockchain.
According to Joseph Weinberg, they have been working with enterprises in finance and other institutions to explore possibilities that will essentially leverage a strong federation.
We are also working on other sidechain initiatives that leverage strong federations and confidential assets via the elements project, both in Canada and globally, that require multi-participant governance guarantees and explicit trust.
In order to work properly, Liquid Networks requires trust from a group of parties and government assurances, whereby rules and regulations are adhered to, which includes a participant network for consensus.
While expediting Bitcoin trading, the system is claimed to act as a “trustless” exchange for its users.
The idea of sidechain projects exists for some time. Their new focus extends to the decentralization of trust into other sectors and digital assets.
It is a classic example of principles that are good on paper, yet do not equate in practice.
Pegged Sidechains by BlockStream or other similar projects, claimed to “enable Bitcoins and other ledger assets to be transferred between multiple Blockchains”. Nevertheless, the right mental model for it to fully work is still needed.