<p>Q1: It depends on the sidechain. Every sidechain can implement their own rule to create and represent/encode adresses.</p>

<p>Q2: This is an active area of research. Some people propose implementing sidechains via Zero-Knowledge proofs or other ideas that either require Bitcoin rules to change or mining cooperation or both. Some sidechains already deployed, like RKS, propose there are a set of nodes you trust to hold custody of bitcoins transferred to the sidechain, much like a bank. </p>

CC BY-SA 3.0
2018-02-27T14:12:25.663Z
2018-02-27T14:12:25.663Z
Osias Jota
<p>Suppose I have my own sidechain and have created a transaction of 100 BTCs from Bitcoin network to my Sidechain. To my understanding, this means 100 BTCs are now locked on Bitcoin Network and 100 pegged BTCs have been created in my sidechain.</p>

<p>Q1. What kind of address will hold these 100 pegged BTCs in my sidechain? Is it an address same as Bitocin wallet address?</p>

<p>Q2. Suppose Alice have 100 pegged BTCs in address A of sidechain, Alice made a transaction of 50 pegged BTCs to Bob which has another address (say address B). We now have 50 pegged BTCs in both address A and address B. How will Bob redeem pegged coins back to real BTCs in Bitcoin Network? Because if we see in Bitcoin's point of view, Alice is the authorized user to spend or redeem her 100 pegged BTCs back to real ones. Whereas Bob does not exist for Bitcoin Network who claims to possess 50 BTCs.</p>

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2018-02-27T11:28:40.873Z
Welcome to Bitcoin.SE! A doozy of a question - I don't think you can do it.
Willtech
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2018-02-27T11:30:08.797Z
@Willtech You mean transactions are not possible in sidechains?
Gagan
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2018-02-27T11:42:59.483Z
Hmm make sense. Then what use case sidechains have? What benefits does it brings when pegged to bitcoin network?
Gagan
CC BY-SA 3.0
2018-02-27T12:01:20.960Z
because you can build a whole new set of rules for transactions on sidechains. There you can create new logic, which is difficult to implement in bitcoin network, or doesn't need its high level of reputation/security/stability/availability... e.g. buy a coffee for very little tx fees. Or create smart contracts, that extend to the layer of OP-Codes. Or do whatever business logic you can think of. At one point in time the sidechain must make sure, that the right amount of bitcoins (a transaction) comes back to the bitcoin network. Otherwise bitcoin network will reject invalid tx.
pebwindkraft
CC BY-SA 3.0
2018-02-27T12:01:25.167Z
See here: https://bitcoin.stackexchange.com/questions/37876/what-is-fed-peg-and-predefined-functionaries-with-sidechains/37885#37885
pebwindkraft
CC BY-SA 3.0
2018-02-27T13:30:00.087Z
@pebwindkraft As you said, "the right amount of bitcoins must comes back to the bitcoin network.". Is it necessary to use the same address by which bitcoins first traveled to sidechains at first place? Like Willtech said, Bob can't do this transaction to bitcoin network, and only Alice can do that.
Gagan
CC BY-SA 3.0
2018-02-27T14:06:54.587Z
@Willtech forks are not sidechains
Osias Jota
CC BY-SA 3.0
2018-03-05T11:15:29.360Z
@Willtech As per my understanding, all forks are not sidechains but all sidechains are forks. Right?
Gagan
CC BY-SA 3.0
2018-03-05T11:16:13.480Z
@OsiasJota can you please verify the above statement?
Gagan
CC BY-SA 3.0
2018-03-05T14:43:17.690Z
No sidechains are forks, nor sofware forks, neither chain forks.
Osias Jota
CC BY-SA 3.0
2018-03-05T14:43:38.280Z
Read about the basic definition of sidechains
Osias Jota
CC BY-SA 3.0
2018-03-05T20:33:41.327Z
@user16961 It seems that I was not correct and there are in fact experimental sidechains already running on Etherium. I will do some more reading and remove a couple of my comments to avoid confusion.
Willtech
CC BY-SA 3.0
2018-03-05T20:36:15.893Z
Sidechain is a blockchain that runs in parallel to the main blockchain which extends functionality through interoperable blockchain networks allowing a decentralized way of transferring/synchronizing your tokens between the two chains. [pegged sidechains whitepaper](https://www.blockstream.com/sidechains.pdf)
Willtech
CC BY-SA 3.0
2018-03-05T20:45:01.233Z
Also, see the excellent Q/A and article linked in the post linked above by @pebwindkraft - note that I have not yet read that the coins can be moved back onto the Bitcoin mainchain.
Willtech
<transactions><address><sidechains>
Transactions in Sidechain
Gagan
# Transactions in Sidechain

(Asked by: username_0 on 2018-02-27)

Suppose I have my own sidechain and have created a transaction of 100 BTCs from Bitcoin network to my Sidechain. To my understanding, this means 100 BTCs are now locked on Bitcoin Network and 100 pegged BTCs have been created in my sidechain.

Q1. What kind of address will hold these 100 pegged BTCs in my sidechain? Is it an address same as Bitocin wallet address?

Q2. Suppose Alice have 100 pegged BTCs in address A of sidechain, Alice made a transaction of 50 pegged BTCs to Bob which has another address (say address B). We now have 50 pegged BTCs in both address A and address B. How will Bob redeem pegged coins back to real BTCs in Bitcoin Network? Because if we see in Bitcoin's point of view, Alice is the authorized user to spend or redeem her 100 pegged BTCs back to real ones. Whereas Bob does not exist for Bitcoin Network who claims to possess 50 BTCs.

**Tags:** transactions, address, sidechains

> **Comments:**
> **username_1**: Welcome to Bitcoin.SE! A doozy of a question - I don't think you can do it.  
> **username_0**: @username_1 You mean transactions are not possible in sidechains?  
> **username_0**: Hmm make sense. Then what use case sidechains have? What benefits does it brings when pegged to bitcoin network?  
> **username_2**: because you can build a whole new set of rules for transactions on sidechains. There you can create new logic, which is difficult to implement in bitcoin network, or doesn't need its high level of reputation/security/stability/availability... e.g. buy a coffee for very little tx fees. Or create smart contracts, that extend to the layer of OP-Codes. Or do whatever business logic you can think of. At one point in time the sidechain must make sure, that the right amount of bitcoins (a transaction) comes back to the bitcoin network. Otherwise bitcoin network will reject invalid tx.  
> **username_2**: See here: https://bitcoin.stackexchange.com/questions/37876/what-is-fed-peg-and-predefined-functionaries-with-sidechains/37885#37885  
> **username_0**: @username_2 As you said, "the right amount of bitcoins must comes back to the bitcoin network.". Is it necessary to use the same address by which bitcoins first traveled to sidechains at first place? Like username_1 said, Bob can't do this transaction to bitcoin network, and only Alice can do that.  
> **username_3**: @username_1 forks are not sidechains  
> **username_0**: @username_1 As per my understanding, all forks are not sidechains but all sidechains are forks. Right?  
> **username_0**: @username_3 can you please verify the above statement?  
> **username_3**: No sidechains are forks, nor sofware forks, neither chain forks.  
> **username_3**: Read about the basic definition of sidechains  
> **username_1**: @user16961 It seems that I was not correct and there are in fact experimental sidechains already running on Etherium. I will do some more reading and remove a couple of my comments to avoid confusion.  
> **username_1**: Sidechain is a blockchain that runs in parallel to the main blockchain which extends functionality through interoperable blockchain networks allowing a decentralized way of transferring/synchronizing your tokens between the two chains. [pegged sidechains whitepaper](https://www.blockstream.com/sidechains.pdf)  
> **username_1**: Also, see the excellent Q/A and article linked in the post linked above by @username_2 - note that I have not yet read that the coins can be moved back onto the Bitcoin mainchain.  

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## 1 answers

### Answer by username_3 on 2018-02-27. Score: 1

Q1: It depends on the sidechain. Every sidechain can implement their own rule to create and represent/encode adresses.

Q2: This is an active area of research. Some people propose implementing sidechains via Zero-Knowledge proofs or other ideas that either require Bitcoin rules to change or mining cooperation or both. Some sidechains already deployed, like RKS, propose there are a set of nodes you trust to hold custody of bitcoins transferred to the sidechain, much like a bank.


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