Blockstream Launches Liquid Sidechain Solution for Bitcoin (BTC)
The off-chain solution arrives at a moment when Bitcoin market prices are facing serious pressures.
Liquid, a sidechain solution for the Bitcoin network by Blockstream, has launched live. With this move, Liquid becomes the first working sidechain solution to Bitcoin scaling, while Drivechain is still in testnet mode.
“Liquid’s native Liquid Bitcoin (L-BTC) asset is backed by a two-way peg to Bitcoin (BTC) and can be redeemed at any time, providing institutions and end users with a secure and rapid way to transfer bitcoin between members with full settlement in two minutes,” explained Blockstream in a recent blog.
Blockstream has been a long-time proponent of its sidechain solutions, but most of the developments were still far from production. Blockstream has also received criticism for trying to subvert Bitcoin and help preserve corporate interests through curated sidechain services.
Blockstream has already ensured a list of partners for the technology:
“23 of the cryptocurrency industry’s biggest players participated in the launch as Liquid members, including Altonomy, Atlantic Financial, Bitbank, Bitfinex, Bitmax, BitMEX, Bitso, BTCBOX, BTSE, Buull Exchange, DGroup, Coinone, Crypto Garage, GOPAX (operated by Streami), Korbit, L2B Global, OKCoin, The Rock Trading, SIX Digital Exchange, Unocoin, Xapo, XBTO, and Zaif.”
The Liquid solution was greeted by some, but seen with skepticism by others, based on previous negative opinions about Blockstream:
But Liquid is the first of its kind working sidechain solution. Competing altcoin projects still have their sidechain technology in development. Startups like Lisk (LSK) and Stratis (STRAT) all have set their sights on developing sidechains. OmiseGo (OMG) also views sidechains as a solution to scaling, and it is possible that Ethereum is also exploring the use of sidechains and “sharding” to achieve scaling.
The Bitcoin network has shown the challenges of scalability, as the economics of mining and block inclusion have led to high transaction fees and slow settlement times. The Liquid sidechain solution could compete with miners for handling some of the transactions. So far, the Lightning Network is the only off-chain solution for Bitcoin, although it is limited in scope and handles relatively few transactions.