Bitcoin Sidechain Is Here
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The company Blockstream announced the launch of Liquid Network, a solution for scaling the bitcoin network. Unlike the Lightning Network, the new second-level tool is a bitcoin sidechain. According to the company, Liquid provides fast and secure transactions that will be useful to brokers, exchanges, and financial institutions.

The acceleration is achieved using Blockstream's direct and reverse conversion of their own coin at the rate of 1:1 with bitcoin, reflected in its own network. The sender of the payment first exchanges bitcoin for L-BTC, which occurs instantly, since each BTC coin is associated with a parallel blockchain Liquid Network and does not require lengthy verification. The token is then quickly transferred to the recipient at the Blockstream wallet address because the parallel network is supported by high-performance supernodes.

Blockstream first announced Liquid in 2015. For about three years, Blockstream has been developing technology to enable fast, secure transactions with confidentiality. The operational director of the project Samson Mow has now announced that Liquid Network product is ready for commercial use. The technology, designed to serve cryptocurrency exchanges, processing services, financial companies, and traders, will be introduced by more than 20 industry representatives such as Bitfinex, Bitmax, BitMEX, OKCoin, Unocoin, Zaif, and others.

“The end game is a platform for the trustless exchange of many assets, with Bitcoin at the center. We knew that having a high speed inter-exchange settlement network with privacy features would be something the market would respond well towards, but we’ve seen an incredible interest from parties interested to issue tokens and assets on Liquid as well. They’ve just been waiting for a secure and reliable solution to do so,” said Mow.

In addition to faster transactions, Blockstream also uses many extensions for Liquid Network. The company plans to include features such as a third-party wallet for Trezor and Ledger, a GreenAddress wallet, and an open source wallet client. Experts believe that the sidechain bitcoin compares favorably with the Lightning Network technology, as it allows for large transactions quickly and without delay. However, the first product can easily use the second as a sub-level.

The Liquid Network network deployed on supernodes boasts low costs and much higher throughput, unlike the Lightning Network channels, which are restricted to a previously confirmed limit and strictly defined nodes. A user of the L-BTC token carries out transfers in the same way as any other exchange sending funds from the crypto wallet. The same applies to the recipient converting the L-BTC, guaranteed to receive an equal amount of Bitcoin.

In the long term, Blockstream hopes that the Liquid Network will be the centerpiece of many sidechains that will allow direct exchange of a wide variety of assets.

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