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Sidechain

Also · Side chain · Merge-mined sidechain

A sidechain is a separate blockchain with its own rules, linked to Bitcoin by a peg that locks BTC on 1 side and issues an equivalent asset on the other. Liquid and Rootstock are examples.

A sidechain runs its own blocks, its own validators and its own features, such as confidential transactions on Liquid or smart contracts on Rootstock. Bitcoin does not know it exists. The link is a peg. Users lock BTC in an address on Bitcoin and receive a representation, L-BTC or RBTC, on the sidechain. Burning that representation unlocks the BTC.

The security of a sidechain is therefore the security of its peg and of its block production, not Bitcoin’s. Liquid relies on a federation of signers. Rootstock is merge-mined by Bitcoin miners and bridged by a hybrid federation. Drivechains, which remain a proposal, would let miners themselves guard the peg. 1 bitcoin on a sidechain is a claim on 1 bitcoin, and the quality of the claim varies.

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Definition reviewed on October 22, 2026

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Liquid moves L-BTC and issued assets on a blockchain separate from Bitcoin, with hidden amounts and fast confirmations. These features depend on a federation, whose role matters when assessing how much control you retain over your funds.

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What is Rootstock? The Bitcoin sidechain for smart contracts

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What is a Drivechain, and why does it divide the Bitcoin community so much?

Drivechains have sparked great interest within the Bitcoin (BTC) community. Are they the ultimate innovation that Bitcoin has been waiting for, or just a new disappointment? Dive into the heart of this debate that animates Bitcoin developers and form an informed opinion on the matter.