Liquid Network
The Liquid Network is a Bitcoin sidechain designed to offer faster and more private transfers than the main Bitcoin blockchain. Developed by Blockstream and maintained by a federation, Liquid runs on the open-source Elements platform and serves as a settlement layer for traders, exchanges, and institutions.
Key Features
- Quick Settlements: New blocks are added to the Liquid Network every minute—much faster than Bitcoin’s typical 10-minute intervals. Since block reorganizations are not allowed, transactions are confirmed and final after just two blocks.
- Asset Issuance: Beyond Bitcoin, the network lets users create and transfer different tokens, such as digital assets, stablecoins, and securities, all on the same network.
- Confidential Transactions: Amounts and asset types in transactions are hidden by default, granting users more privacy compared to Bitcoin’s transparent ledger.
When bitcoin is transferred into Liquid, it is called L-BTC. Using L-BTC is somewhat like exchanging cash for casino chips; the bitcoin is locked on the main chain and a matching amount of L-BTC is issued for use within Liquid.
How to Use the Liquid Network
To move bitcoin onto Liquid, users perform a “peg-in” by sending bitcoin to a specific address generated by Liquid. Once confirmed, they receive an equal amount of L-BTC, which they can then spend on Liquid’s network. To return to Bitcoin, they do a “peg-out”—depositing L-BTC back before the system sends out regular bitcoin to a whitelisted address.
Wallet support for Liquid is currently limited, but you can track transactions and activity using a Liquid Network block explorer.