Sidechains: Best Bet in Crypto Gambling?

Another day, another new term to learn. This time, we discuss sidechains, blockchain networks created to enhance the capacity of major cryptocurrencies, like Bitcoin and Ethereum.

Stay with Crypto Gamba to learn what sidechains mean in the context of crypto gambling and how they can improve the overall gaming experience.

What Are Sidechains?

Before we look at how sidechains can transform the iGaming industry, let’s get familiar with the term. A sidechain represents an independent blockchain network connected to a parent blockchain, also known as a mainnet. Such a concept enables users to move their digital assets from the mainnet to the sidechain, from which they can complete transactions in a faster and more cost-efficient manner.

The concept was introduced over 10 years ago by Bitcoin engineers, looking for a solution to the challenges existing within the mainnet. Today, BTC has two sidechains, Rootstock and Liquid Network. Another example is Polygon, which is Ethereum’s Layer 2 scaling solution.

How Do They Work?

For sidechains to operate, two components are required: a two-way peg and smart contracts. The former facilitates the transfer of crypto between networks. In a nutshell, a two-way peg enables funds to be locked on the mainnet while the same amount is unlocked on the sidechain, and vice versa. This allows users to move their digital assets back and forth.

At the same time, smart contracts validate and verify crypto transfers from the mainnet to the sidechain. They minimise security risks by enforcing honesty among the validators involved in transfers.

Crypto Casino Challenges Sidechains Can Solve

As much as major cryptocurrencies are safe to use, there are a few challenges when using them at crypto casinos. Below, we take a closer look at these issues and how sidechains can address them.

Potential Risks

Although sidechains may seem like the solution to all the challenges associated with mainnets, there are a few things to keep in mind. First of all, there are certain security concerns, resulting from the nature of sidechains, which are less decentralised. Fast confirmations are possible because sidechains rely on a smaller number of nodes, which increases their vulnerability.

At the same time, the security model used by sidechains may not be as robust as the one employed by mainnets. Therefore, they may be more vulnerable to attacks, which can further, if performed successfully, lead to the loss of trust in the entire ecosystem relying on a certain sidechain.

Last but not least, we must highlight that not all crypto casino players are tech-savvy and may be intimidated by all the things they must handle to use sidechains. To put it simply, sidechains are not considered user-friendly, as they often require the use of multiple wallets, keys, and addresses. So, transferring funds from the mainnet to the sidechain requires specific skills and time to acquire them.

Final Thoughts

So, are sidechains the best bet in crypto gambling? One thing is for sure: when it comes to crypto gambling, sidechains have significant advantages. They can make gambling more accessible by reducing the cost of transactions while increasing their speed.

If you consider using sidechains for casino deposits and withdrawals, be sure to take trade-offs into account. To avoid unpleasant surprises, consider transferring smaller amounts from the mainnet to the sidechain, thereby preventing the risk of keeping all your assets in one place. Make sure to get informed about sidechains and how they work, and select only trusted platforms leveraging them.