The correct approach to deploying a solution built on Elements

Elements can operate as a general purpose, standalone Blockchain or as a pegged Sidechain

A general purpose blockchain built on Elements acts as a standalone blockchain which has no dependency on another blockchain for its asset issuance.

In the context of the Elements platform, a Sidechain is an extension to an existing blockchain. Assets are transferable between chains allowing the main chain to benefit from the enhanced features of the sidechain, such as rapid transfer finality and confidential transactions. While a sidechain is aware of the main chain and its transaction history, the main chain has no awareness of the sidechain, and none is required for its operation. This enables sidechains to innovate without restriction or the delays associated with main chain protocol improvement proposals. Indeed, rather than trying to alter it directly, extending the main protocol with a sidechain allows the main chain itself to remain secure and specialized, underpinning the smooth operation of the sidechain.

An example of an Elements based sidechain in production use is Blockstream’s Liquid; a sidechain with different features, capabilities, and benefits than the main Bitcoin blockchain. By extending the functionality of Bitcoin and leveraging its underlying security, the Liquid network is able to provide new functionality that was previously not available to Bitcoin users. Liquid was designed to address the needs of exchanges, brokers and OTC trading desks. It enables the rapid, confidential and secure transfer of funds between participants and provides a solution to the inherent problem of delayed transaction finality on the Bitcoin network. Every Liquid bitcoin held within the sidechain is pegged to bitcoin on the main chain using a Federated 2-way Peg. This allows bitcoin to be deposited in the sidechain whilst retaining the ability to withdraw assets back to the main Bitcoin blockchain.

Elements provides the tools needed to prototype and deploy your own blockchains and sidechains in a cost effective and timely manner.


When to use a Blockchain

A blockchain is an inherently inefficient means of data storage when compared to centralized database solutions. This inefficiency is a price worth paying only if you genuinly require the properties that a blockchain offers. It is important to correctly evaluate the requirements of your proposed system before deciding on a blockchain based solution.

Note: If your requirements do not necessitate it, implementing a blockchain based system will be counterproductive.

When should you use a blockchain as a solution?

  • No central or single party should have sole authority to write data entries.

  • A group of participants need to be able to access and audit data and be sure that it is cryptographically protected against tampering.

  • Speed of transaction is not a key requirement. Note that Elements’ Federated Block Signing process is still much faster than Dynamic-Membership Multi-party Signature (DMMS) Proof of Work (PoW) as found in Bitcoin though.

  • Immutability (the inability to adjust confirmed transactions) is required.

  • Security and redundancy with no single point of failure is required.

  • Participants have the same incentives to participate.


Deciding if a blockchain is an appropriate way to deliver your project is a very important process as Blockchains only provide solutions to very specific types of problem.

In the Code Tutorial

Learn how to run Elements as a standalone blockchain

Learn how to run Elements as a sidechain