Transactions on the Liquid sidechain are said to enable much faster transfers than the main Bitcoin blockchain. How fast are the the transfers? Does it still use a blockchain?
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This sort of comes across as spammy.– ClarisCommented Nov 2, 2018 at 8:35
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@Anonymous I see how one might feel that way, I just wanted to find the answer to this question and didn't find it here. So I researched a bit and made a Q&A. Feel free to edit.– Jonathan CrossCommented Nov 2, 2018 at 22:29
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1 Answer
Does it still use a blockchain?
Yes, it is using a blockchain, however it is "federated" with a known set of participants which enforce consensus rules. It does not utilize proof-of-work mining. The Liquid sidechain allows 2-way pegging of assets eg: L-BTC <-> BTC.
How fast are the the transfers?
The Liquid white paper mentions 1 minute block times with the possibility to reduce this:
"Today, the implementation allows for one minute blocks. It will be possible to reduce the time to the amount required for the pre-commit and agreement threshold time of the network traversal"
However (as of October 29th, 2018) the Blockstream website has a bullet point indicating the actual settlement time is 2-minutes currently:
"React to trading opportunities faster thanks to two minute settlement times when sending between exchanges."
This should allow much faster transfers between exchanges which could potentially let users trade L-BTC upon receipt as though it were BTC.