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Merge pull request #520 from mtsalenc/patch-1
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fix: misleading docs
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sassal authored Aug 7, 2021
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Expand Up @@ -13,11 +13,11 @@ Sidechains are Ethereum-compatible, independent blockchains which employ their o

## How Do Sidechains work?

Layer 2 sidechains are distributed ledgers which operate independently and in a parallel capacity to the Ethereum mainnet. Nodes within a sidechain network are responsible for confirming & processing transactions, writing transactions to blocks, and maintaining consensus across the network. Security is the responsibility of each sidechain; it is not directly inherited from Ethereum. Sidechains often incorporate alternate validator selection and consensus mechanisms to provide faster transaction times.
Sidechains are distributed ledgers which operate independently and in a parallel capacity to the Ethereum mainnet. Nodes within a sidechain network are responsible for confirming & processing transactions, writing transactions to blocks, and maintaining consensus across the network. Security is the responsibility of each sidechain; it is not directly inherited from Ethereum. Sidechains often incorporate alternate validator selection and consensus mechanisms to provide faster transaction times.

### Security & Consensus

Sidechains are responsible for their own security and consensus processes. This allows for innovation and optimization, with the opportunity for increased transaction throughput and higher speed/lower cost transactions for users. Sidechains use a variety of validator selection methods to achieve these goals while maintaining security. Smaller validator sets are more susceptible to collusion-based attacks, so strong incentives must be in place to encourage honest validation and discourage malicious behavior. Examples include:
Since sidechains are responsible for their own security and consensus processes they are layer 1, not layer 2. However, trading off security allows for innovation and optimization, with the opportunity for increased transaction throughput and higher speed/lower cost transactions for users that are willing to accept potentially higher centralization. Smaller validator sets are more susceptible to collusion-based attacks, so strong incentives must be in place to encourage honest validation and discourage malicious behavior. Examples include:

*Proof-of-Authority*: Validators (network nodes responsible for signing transactions and maintaing a consistent ledger) are pre-selected for the protocol. An example is the [POA Network](https://poa.network). POA uses an Authority Round consensus where selected validators, in this case US Notary Publics with public reputations at stake, take turns signing transactions and sealing blocks. The POA model improves scalability (5 second block times, low transaction fees) while sacrificing a degree of decentralization (validators are pre-selected and the protocol has a limited validator set).

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