Bitcoin Sidechain

Definition ∞ A Bitcoin sidechain is a separate blockchain linked to the main Bitcoin blockchain. It permits tokens and other digital assets to move between the two chains. This mechanism allows for new functionalities and increased transaction capacity without altering Bitcoin’s core protocol. Sidechains maintain a connection to Bitcoin through a two-way peg, securing assets transferred to the sidechain.
Context ∞ Discussions around Bitcoin sidechains frequently center on their potential to scale Bitcoin and support a wider array of applications, such as smart contracts and privacy-focused transactions. The development of new sidechain projects and their security models remains a significant area of interest for network scalability and utility. Their adoption could significantly impact Bitcoin’s broader use cases and market position.