Syncchains vs. Sidechains: What is the Difference?

Beginner’s Guide / 08.07.2020

Sidechains have been around since 2014. They are branches of the leading blockchains and aim to strengthen the networks’ effectiveness and features. Despite this, sidechains have a couple of shortcomings that make the system far from perfect. 

Developers in the crypto space proposed the introduction of syncchains as a mitigation solution. However, the two seem to be quite confusing, and not many can tell them apart. This article will shed more light on both networks for you to have better know-how. 

Sidechains Explained

Sidechains are branches of the leading blockchain that enable transferring funds and assets from the main blockchain to the sidechain. They exist parallel to the parent blockchain but do not affect the main blockchain. The primary aim of the sidechains is to increase the effectiveness of blockchain technology. Sidechains become more appealing, thanks to the higher speed, low transaction rates, extra features, and easing congestion in the main blockchain. Sidechains link to the parent blockchain through two-way pegging, working at rates set by the parent blockchain. 

It would be best to note that sidechains and hard forks are not the same. Most people assume that the two are the same. However, sidechains are independent of the parent blockchain and do not affect the main blockchain, unlike hard forks. Hard forks entirely change the protocol of the network by altering the preexisting code. They can validate previously invalid blocks in a blockchain and vice versa. Moreover, all nodes in the system need to upgrade to the latest protocol to enable the hard forks’ functionality. 

How do Sidechains Work?

Let us simplify the process of how sidechains function. First, a user wants to transfer funds or assets to the sidechain. For this to happen, they must have an output address. Once the funds or assets have been sent to the output address, they are temporarily unusable. A confirmation travels through the chain, accompanied by a waiting period. The waiting period helps increase security. 

Later, the exact amount sent from the main blockchain transfers to the sidechain. Freezing of the main blockchain’s wallet is next. Thus, the user can start using the sidechain’s wallet. The vice versa of the process transpires for the reversal of funds to the main blockchain. Sidechains have their miners, but some implement merge-mining, whereby they use the mining protocols of the parent blockchain. 

The Problems With Sidechains

Since sidechains are ideally independent, any malfunction in it will not affect the parent blockchain. The vice versa is also true for the parent blockchain malfunction. Nonetheless, if this situation happens, the functionality of the two-way peg lowers considerably. 

The fact that sidechains are prone to discrepancies shows that they do not come without fault. Below are some of the common problems with sidechains.

  • Costly Set-up 

The security systems of sidechains depend wholly on their miners, who ensure they are impenetrable. The process of coming up with new sidechains, hence, becomes relatively costly. You can owe this fact to the need for significant income inputs to form a new sidechain for a secure firewall.

  • Federations

Federations are necessary for the transactions between a parent blockchain and the sidechains. The downside is, federations add an extra layer between the main blockchain and the sidechains. For hackers, the additional layer is a weakness they can manipulate. 

  • Double-spending

With sophisticated attacks, double spending is possible in sidechains. Miners can take advantage of having hash power to produce blocks that can aid in the claim of already used tokens. An attacker can tamper with the simplified payment verification (SPV) bridge to feed it with a false chain. After successfully tricking the federation into buying into the fabricated chain as a legit one, double spending is probable. They undertake a peg-out in a peg-out process and reverse the chain to the former condition until a matching transaction comes.

  • Slow Transactions

Several confirmations are vital for the peg-in and peg-out processes. The waiting period for the same until spending of funds is possible takes a while. These logistics slow down the processes making the system unreliable to a portion of users. 

Understanding Syncchains

The challenges that come with sidechains necessitate the need for an upgrade. Rootstock (RSK) is trying new developments for a faster, better system. Thus, the invention of syncchains came to be. The team that created IOVlabs is behind this upgrade. They wish to achieve a faster system for transfer processes while eliminating double-spending risk, among others. A block in the sidechain will need to identify the parent blockchain and correspondent parent sidechain. 

The main features of syncchains are:

  • Delayed Dual-parenting

Dual parenting is a critical technology in the formation of syncchains. This concept necessitates a sidechain block to have the main block parent and a sidechain parent. However, there is an alteration of this technology for a delayed effect on the main block parent. The main blockchain parent lags by a couple of blocks.

Using the Checkpoint Selection Algorithm (CSA), block mining in the main chain delays a few blocks to be par with the sidechain block mining. In that case, a reversal in the main chain block does not affect the sidechain block unless the number of blocks mined in the main chain surpasses the number of blocks, the process delays.

  • Peg Transaction Linking

The process focuses on connecting peg-in and peg-out transactions. Mainly, the process seeks to try eliminating risks of double-spending while joining or reversal from the sidechain. Securing these transactions renders false transactions useless. Once you request peg-in or peg-out transactions, federation functionaries sign a template for transfer to or from the main chain. After, you can expect the addition of the transaction block to the respective chain. 

  • Coinbase Anchoring

Coinbase anchoring entails basing transactions on specific blocks by adding a new operation code to the Bitcoin protocol. That is, OP_CHECK_INPUT_BLOCK_HASH. It discredits blocks with hashes that differ from the peg-in block hash by attaining a block hash as a stack argument. The OP_CHECK_INPUT_BLOCK_TIME is another option, which discredits transactions based on timestamp as per the opcode argument. The third option is spending an output from a Coinbase transaction. 

Author’s Note

Ever since their introduction, sidechains have been increasing the superiority of digital coin systems. By decongesting the cryptosystems and adding features to the shared network formed, sidechains are evolving blockchain technology. 

Nonetheless, we see issues that arise from sidechains. For the ultimate upgrade, The introduction of syncchains will eliminate most, if not all, of these issues. You can be sure that sidechains will improve in varying ways, from speedy transactions to increased security, if implemented correctly.

Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.