Blockstream CEO says Bitcoin sidechains will kill altcoins

The development of sidechains could transform Bitcoin into an all-useful blockchain protocol and make many altcoins redundant, according to sidechain pioneer and Blockstream CEO Adam Back.

Speaking on a panel at Transylvania Crypto Conference, Forbes reported, Back stated that altcoins would have "Less credibility" when sidechain technology could facilitate "Easy-to-use extension mechanisms" for Bitcoin-that is, allowing developers to augment the original layer-one cryptocurrency with new and innovative features.

The comments reaffirm Back's long-standing reflections on "User-facing applications of sidechains" in the original sidechain whitepaper, authored in 2014 by his Bitcoin development firm Blockstream, which supposed that these parallel systems could offer faster, more sophisticated applications of BTC compared to the "Liquidity shortages" and "Market fluctuations" associated with smaller-cap altcoins.

For the uninitiated, sidechains are standalone protocols linked to the main chain via a two-way peg.

Assets are locked on the main chain and then represented on the sidechain, where they can be transacted on a less encumbered, supposedly faster, network.

Back and his colleagues at Blockstream have for years spoken of a time that sidechains would administer the coup de grâce to many of the altcoins that have attempted to outdo Bitcoin in their various ways.

Blockstream unveiled its first sidechain initiative in October last year, Liquid, a Bitcoin sidechain connecting 23 major crypto exchanges and institutional trading shops.

Offering sub-two-minute transactions with privacy features and an "Issued Assets" function for Ethereum-style assetization using the Bitcoin protocol, Liquid would certainly look like a step towards a future built on Bitcoin.

Rootstock, an open-source sidechain designed to bring smart contract functionality to Bitcoin, has a similar issue, relying on 25 high-profile blockchain companies to secure BTC transactions in and out of the peg wallet.

Until sidechains can help Bitcoin compete with its rivals in a more decentralized fashion, their usage may be limited to organizations already transacting in BTC.Cover Photo by Miltiadis Fragkidis on Unsplash.