Blockstream has announced its first Bitcoin sidechain called Liquid, set to be launched in early 2016. The sidechain will serve payment processors and brokerages among a dozen other major traders and licensed exchanges with instantaneous and secure transactions.
Months after releasing the source code of Sidechain Elements – a codebase for developers to experiment and build sidechains, Blockstream, a startup comprising of a group of core Bitcoin developers has announced the first commercial application of sidechain technology with Liquid.
Blockstream, having raised $21 million in venture capital late last year is gearing to deploy Liquid to be used among exchanges, wallets and other Bitcoin service providers.
The aim is to reduce Interchange Settlement Lag (ISL) experienced during transactions when bitcoin is moved between accounts to improve upon interchange liquidity while maintaining decentralization and security.
In a statement, Blockstream CEO Austin Hill counted a number of initial launch partners who are also some of the biggest bitcoin exchanges and services around. They include Bitfinex, Kraken, BTCC, Unocoin and Xapo. Other exchanges and services that wish to be a part of the sidechain will, like the above startups, be charged a monthly subscription fee.
Nearly a full year after the release of their sidechain whitepaper, Blockstream is sticking with its faith in Bitcoin by designing Liquid as “an interoperable sidechain that extends the Bitcoin blockchain while adding an auditable, cryptographically-strong commercial privacy component.”
With its first commercially-usable sidechain, Blockstream is aiming to circumvent the areas where the Bitcoin blockchain is found lacking while retaining decentralization. For instance, transactions processed on Liquid are not processed by the mining community.
Exchanges and companies using Liquid will, in effect, have the means to transfer funds and assets between the blockchain and an alternative sidechain via a ‘two-way peg’ using a consensus security protocol to authorize transactions.
When implemented, users with accounts at the exchanges using Liquid will be able to move bitcoin from one account to another in an instant, without the confines of a waiting period for the transaction to be confirmed on the blockchain.
Images from Shutterstock and Blockstream.
Last modified: August 8, 2020 6:13 PM UTC