Here’s How Much Bitcoin Is Currently Locked Up in Sidechains
William Suberg's original article for cointelegraph.com reduced by 40%
Almost $77 million of Bitcoin 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 Oct. 17, a total of 9,661 BTC or a tiny 0.054% of today's Bitcoin supply resides in three major sidechain projects.
Sidechains are separate blockchains tied to a cryptocurrency's regular blockchain, i.e. mainchain. Sidechains have existed for several years and have various functions depending on developers' aims.
Blockstream's Liquid sidechain, or LBTC, for example, focuses on interexchange operability while giving traders enhanced features not yet available on the Bitcoin mainchain. Liquid, which launched in October 2018, currently includes a modest 89 BTC. That figure is dwarfed by the largest sidechain, Binance Chain, which has 9,001 BTC.
Even the Wrapped Bitcoin sidechain, which is in fact an Ethereum-based ERC-20 standard token, has 571 BTC - more than Liquid. This week, wallet provider Blockchain and digital asset manager CoinShares launched a Bitcoin sidechain of their own in the form of a gold token network.
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