What is a Bitcoin sidechain?
A separate blockchain that bitcoin can move to and back from, trading Bitcoin's rules for different features or speed.
Coins move to a sidechain through a peg: bitcoin is locked on mainnet and an equivalent amount is issued on the sidechain, which runs its own rules and block times. Moving back reverses the process.
A sidechain is not Bitcoin: its security depends on its own design, such as a federation of signers, not on Bitcoin's miners alone. Liquid is one example. Payments on a sidechain do not appear on a Bitcoin explorer.
References
- Blockstream, “Liquid Network”.