Bitcoin locked up
Bitcoin is Currently Locked Up in Sidechains
October 17, 2019
Bitcoin locked up
Bitcoin is Currently Locked Up in Sidechains
October 17, 2019

Almost $77 million of Bitcoin (BTC) is currently unavailable to use on the network — not because it is lost, but because it is locked up in sidechains.

Data from block explorers confirms that as of October 17, a total of 9,661 BTC ($76.96 million) or a tiny 0.054% of today’s Bitcoin supply resides in three major sidechain projects. 

However, sidechains are separate blockchains tied to a cryptocurrency’s regular blockchain, i.e. mainchain. Users can interact with it through a pegging mechanism; they send funds to and from the sidechain, with security features ensuring coins are not available on both chains at once.

Likewise, sidechains have existed for several years and have various functions depending on developers’ aims. 

For example, blockstream’s Liquid sidechain, or LBTC, focuses on interexchange operability while giving traders enhanced features not yet available on the Bitcoin mainchain

Binance Chain leads balances

Liquid, which launched in October 2018, currently includes a modest 89 BTC ($709,700). That figure is overlooked by the largest sidechain, Binance Chain, which has 9,001 BTC ($71.74 million).

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Even the Wrapped Bitcoin (WBTC) sidechain, which is an Ethereum-based ERC-20 standard token, has 571 BTC ($4.55 million), more than Liquid.

However, WBTC debuted in January this year, while Binance Chain, the cryptocurrency exchange, Binance’s in-house project — got its mainnet unveiling in April. 

Thus, CoinShares, the wallet provider Blockchain and digital asset manager launched a Bitcoin sidechain of their own in the form of a gold token network, this week.


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Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. She is an archetypal writer, who loves to create her own little world with words and locutions. Apart from this, her interest lies in blockchain technology and cryptocurrency space, as she loves writing about blockchain and other blockchain-related articles. Currently, she is working on blockchain-based news, reviews, featured articles, and guides.
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