Dubbed Liquid, the unlaunched offering will serve Bitcoin exchanges, payment processors and traders by reducing the time in which Bitcoin-denominated funds can be transferred between accounts at these institutions.Five Bitcoin startups – Bitfinex, BTCC, Kraken, Unocoin and Xapo – will operate the private sidechain, allowing partner exchanges to move funds between order books without the need to transfer funds on the Bitcoin blockchain.
First announced in April 2014, sidechains were hailed as a radical concept for boosting the functionality of Bitcoin by allowing assets to move from the main Bitcoin blockchain to an alternative blockchain and back through a system of two-way pegging.
Once on an alternative blockchain, the assets can effectively be governed by a different set of rules, while still maintaining their ability to be transferred back to the Bitcoin blockchain at a later date, and thus redeemed via the existing Bitcoin market infrastructure.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now