Scaling Bitcoin with Subchains

In an email to the bitcoin-dev IRC room, Andrew proposed using sidechains as a way of scaling, but Pieter (sipa) and other experts are against this approach. Andrew’s proposed model suggests that transactions go to a chain based on the addresses involved, however, it will require a cross-chain transfer for an average transaction to get the money to the recipient because the recipient’s wallet is usually associated with a chain that is different from the sender’s. This can be done using either an atomic swap or the 2-way peg transfer mechanism, both of which have their own drawbacks such as slow processing time, reduced security, and increased complexity. This approach doesn’t offer any scaling benefit, reduces the security of the system significantly, and makes it less convenient to use. Sidechains do not directly solve any of the scaling problems Bitcoin has, but rather they offer a mechanism for easier experimentation so that new technology can be built and tested without needing to introduce a new currency first. This experimentation could eventually lead us to discover mechanisms for better scaling, or for more scalability/security tradeoffs like Witness Segregation that Elements Alpha has.