Lisk is yet another member of the world of cryptocurrencies expected to carve out a niche for itself in what can be considered a crowded space. For now, Lisk is a blockchain platform that promises plenty as an investment platform.
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How Lisk is different
Scalability is a major issue with most other cryptocurrencies including Bitcoin. Since the Lisk Platform implements a sidechain for every application developed on it, it gets lot easier to scale with significantly less bloat. With applications developed on sidechains, in the event of anything going wrong on blockchain from another application, Lisk will not be forced to hardfork since such an event does not impact the Lisk blockchain. Sidechains also offer more security apart from faster application for app developers. Another feature that sets Lisk apart is its open source platform. Lisk has about 29 contributors presently for a peak at what they are currently working on, you can go here.
Another feature associated with Lisk is that professionals can develop platform independent messengers, social networks, financial applications, exchanges, prediction markets, storage platforms, exchanges, sharing economies, online shops, platforms for contract execution, IoT applications and lot more on the developer’s own blockchain making them wholly decentralized and minus the hassles of complex consensus protocols or the P2P network algorithms.
The Sidechain is a major feature that Lisk is offering and that is loaded with several advantages. The Sidechain is a blockchain that is wholly customizable, free from spam or pollution on the sidechains as well as the mainchain. All parameters, specifications, as well as transaction types can be altered to perfectly suit the blockchain application that is created. When you need to block any spam on your blockchain, you always have a token value that is needed for saving any data on your blockchain, like for instance, a fee for sending transactions. In the Lisk Sidechain, you have the ability to use either LSK tokens from mainchain or a wholly new custom token. But, if you use the LSK tokens from the mainchain within the sidechain, there is a limitation. Tokens cannot be simply transferred from one blockchain to the other. In other words, it is essential to remember that the sidechain is always a wholly independent and new blockchain. This is similar to the fact that you cannot use a Litecoin in the Bitcoin network.
A different transaction type for transferring LSK tokens
To circumvent the limitation with regard to transferring the LSK tokens, Lisk has evolved a special transaction method to transfer the LSK tokens to the sidechain from the mainchain. In practice, the LSK tokens do not leave the mainchain ever. They just get transferred to the Lisk account of the sidechain on the mainchain. Simultaneously, equal amount of LSK tokens are duplicated on the sidechain and can be used in the normal course.
A specific advantage of this approach is that when a blockchain or sidechain application is badly written all the LSK tokens remain safe and the sidechain owner can retrieve them easily. However, this would also mean that the sidechain owner should be trustworthy. However, this provision may not be useful in every type of blockchain application but can be advantageous for reputed individuals or start-ups that own the blockchain application.
For developers aiming at applications that are truly trustless, and not wanting to keep LSK tokens of other users, then the developer can simply issue his own custom token or multiple tokens on their sidechain and employ them as an entirely new cryptocurrency. This way, the new cryptocurrency can be distributed through an ICO or sold on exchanges. This will allow users to have exclusive and full control over the custom tokens created by them completely devoid of the trust factor and can be used inside their blockchain application. A mini exchange system can also be built inside the developer’s blockchain application to exchange the custom tokens against LSK tokens with ease. If a hardfork becomes necessary on account of any bug noticed in the Lisk blockchain application or sidechain, then you will need to hardfork only the sidechain. The mainchain will remain fully immutable and unharmed.
Lisk is still in the making in some sense and it could be several months before an ICO or similar moves can be expected.