Nested Blockchain Meaning

What Is a Nested Blockchain?

Layer 2 solutions are protocols built on top of existing blockchains to address scalability issues. They aim to reduce congestion on the main chain by processing transactions off-chain and then reporting them back to the primary network. Nested blockchain takes this idea a step further. 

They create a multi-layered structure where the main blockchain, often called the ‘parent chain’, sets the overall parameters for the network. Beneath this parent chain, a series of interconnected secondary ‘child’ chains operate, each handling specific tasks or transactions.

How Do Nested Blockchains Work?

Here’s how it works: The ‘parent’ chain delegates work to ‘child’ chains, which process transactions independently. Once the child chains complete their tasks, they relay the results back to the parent chain. This hierarchical setup allows for parallel processing of transactions, significantly boosting the network’s overall capacity.

One of the key advantages of nested blockchains is their flexibility. Each child chain can have its own consensus mechanism, block time, and even token system, tailored to its specific use case. This customization allows for optimized performance across different types of transactions or applications.

However, it’s important to note that while nested blockchains offer impressive scalability benefits, they also come with some trade-offs. The additional layers of complexity can introduce new security considerations, and there’s always the challenge of ensuring smooth communication between the various levels of the network.

Despite these challenges, nested blockchains represent an exciting frontier in blockchain scalability. They offer a promising solution to the ongoing issue of transaction throughput, potentially paving the way for blockchain technology to handle the demands of global-scale applications.