As Don Tapscott once said, “The first generation of the digital revolution brought us the Internet of information. The second generation—powered by blockchain technology—is bringing us the Internet of value: a new, distributed platform that can help us reshape the world of business and transform the old order of human affairs for the better.”
Traditional consensus algorithms like proof-of-work are inefficient at scale, and smart contracts are limited to a single ecosystem. However, by creating a “blockchain of blockchains” architecture, more complex event-driven architectures can be created using separate ecosystems that are independently validated. For example, a smart city could be programmed to execute an emergency shutdown if certain criteria are met. A designer of this system would want to make absolutely sure that the conditions were true before executing a threat response of this magnitude. By having each IoT sensor group that measures a specific environmental condition on its own “sidechain” network, and sharing their ‘state’ to a main authoritative blockchain network, one can create data integrity checks that prevent these programs from triggering by accident in a fault tolerant and distributed manner.
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