What Is Lisk?
Blockchain has been a buzzword recently for its openness, decentralized and authority-free features. Yet there are certain constraints on some blockchains that may restrict their full potential. Enter Lisk, the blockchain-based application platform that allows one to develop a variety of apps, and support them with their own customized blockchains.
Lisk Architecture and Workflow
Just like Google’s Play Store and Apple’s App Store allow individual developers to build and distribute apps, Lisk provides a similar blockchain-based application platform. The big difference is that Google and Apple control their respective app stores, while Lisk is decentralized and distributed to run across many computers on the public blockchain.
The backend refers to the core functionality of an app which resides on the server/blockchain network and gets executed based on the code, while the frontend is the user interface that a user sees and interacts with on his computer/mobile device.
To draw an analogy, what you see on the Uber app installed on your mobile phone is the frontend. Starting it and interacting with the various options, like tapping the “Ride Now” button, are frontend features that trigger relevant backend code.
It’s the backend logic that does the real work, like start searching for nearby cabs when you use the Uber app, or send cancellation instructions when a user hits the “Cancel Ride” button.
How Lisk Differs from Other Blockchain dApps Platforms
There are several blockchain-based platforms that allow the creation, hosting, and execution of dApps on their networks. They host everything on a single blockchain, or they are more customized for private blockchains. The most prominent example of such a dApp-based blockchain platform is the Ethereum network that runs smart contracts. (For more, see An Introduction to Ethereum Classic.)
In fact, Lisk is rumored to be a fork of Ethereum, a myth that Lisk founders refute.
However, Lisk differs from such dApps platforms in a major way. Along with apps development, Lisk developers can create and configure their own blockchain as a sidechain. These sidechains, which are blockchains in their own existence, are associated with the Lisk network’s primary blockchain called the mainchain. The developer has full control to create their own sidechain as per the requirements of their app.
A major problem affecting the single blockchain-based platforms is that fake computing requests or spam transactions can quickly hog the blocks and computing processes on the only available blockchain, and slow it down considerably. The spammers may target vulnerability in one single app, but its effect may span across the entire blockchain.
Lisk offers modularity, wherein each app will have the capability to run on its own sidechain, thereby keeping the mainchain agile, free and efficient. Before Lisk, developers were bound by the constrained resources as available on the only blockchain network on which all the apps reside.
Lisk architecture also supports app leveraging – using other existing apps/services on the Lisk network. Say a developer is building an ecommerce store app that also needs to carry images of the products. As everything is transparent and open-source on Lisk, he can easily plug into an existing image storing app that already exists on Lisk without developing that particular functionality from scratch.
Lisk ICO and Trading
Lisk has its own virtual currency coins called LSK tokens.
Lisk launched an ICO between February and March 2016 to sell 100 million LSK. It was successful in raising 14,000 BTC in exchange for 85% of the LSKs going to ICO participants.
LSK tokens can be bought and sold on several major exchanges including Bittrex, Poloniex, YoBit and Jubi. LSK tokens can be bought using Chinese yuan and the Japanese yen, or by exchanging for other cryptocurrencies. At present, purchase with other fiat currencies is not possible.
LSK currently ranks 14th on the list of cryptocurrencies by market cap, as per data in February 2018 from CoinMarketCap.com. (See also, These Cryptocurrencies Have Market Caps Greater Than $1B.)
Where Do LSK Coins Lie in Lisk?
Lisk blockchain modularity brings in certain special transactions and handling.
Just like one can’t send a particular cryptocoin, like Litecoin, to another cryptocoin network, like bitcoin, one is not allowed to move LSK tokens between different Lisk blockchains. It means that transfer of LSK tokens is prohibited between the mainchain and sidechains, as each is treated as an independent blockchain. However, Lisk offers special transaction types to address the issue.
All the LSK coins lie on the mainchain and never leave. If LSK coins are required to back an application (that is, to be moved to a sidechain), they are simply transferred to the sidechain owner’s Lisk account. This is accompanied by an equal number of LSK tokens getting replicated on the sidechain which can be used as normal. This offers security in case the blockchain application falters or the sidechain is configured to work incorrectly. All LSK tokens can be easily retrieved from the mainchain.
Lisk maintains the trustless virtue of blockchain. In case you want to build a truly trustless application, you can leverage the power of Lisk and introduce a whole new cryptocurrency on a sidechain that remains valid only on that sidechain. The sidechain owner is free to even go for an ICO or sell those coins on an exchange. That’s the potential of Lisk – it allows you to build whatever you deem necessary.
The Bottom Line
Despite all the known issues which can be addressed by technology tweaks and upgrades, Lisk sets a new benchmark in blockchain technology as it truly opens up full blockchain potential to individual developers. (See also, 4 Top-Performing Alternatives to Bitcoin.)
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
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