NEW YORK (InsideBitcoins) — The concept of sidechains was first introduced to the general public over the summer in an episode of Let’s Talk Bitcoin that featured cryptographer Adam Back and entrepreneur Austin Hill. Since then, there’s been plenty of debate over whether the idea could bring an end to the altcoin scene or if it can even work in practice.
The only problem with the debate up to this point is that there hasn’t been a widely available description of what sidechains are and how they function. That changed today with the release of a new paper from Adam Back, Gregory Maxwell, Pieter Wuille, and six other contributors.
What are sidechains?
Sidechains are basically a way to take all of the innovation happening in the alternative cryptocurrency space and integrate it directly with the Bitcoin blockchain. The concept could potentially destroy the value proposition of many altcoins due to the fact that nearly every altcoin’s main features could be implemented as a sidechain to Bitcoin.
The two-way peg system used in sidechains means that there is no need to create new cryptocurrencies or increase the current 21 million bitcoin supply cap. Blockstream did not mince words in the update to their website mentioning the “outright fraud associated with alternative crypto-currencies.”
The debate has started
The release of the sidechains paper will no doubt cultivate a renewed debate on the concept, and some noted critics, such as Bitcoin researcher and developer Peter Todd, have already voiced their issues with sidechains on Twitter. In addition, Todd has already posted his continued skepticism in a detailed post on reddit, after receiving an advance copy of the white paper. For now, the main criticisms associated with the idea revolve around the possibility that an implementation of the theory could lead to further centralization of Bitcoin mining.
It’s possible that a longer debate is right around the corner in the form of an Adam Back and Blockstream AMA on Reddit tomorrow. There’s no doubt that this will become a focal point of conversation for the Bitcoin community over the next few months.
— Blockstream (@Blockstream) October 22, 2014
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