The initial sidechain included in Sidechain Elements works on a federated security model; while it’s still peer-to-peer and consensus-based, security for the blockchain is provided by a set of predefined functionaries in an arrangement called a Fed-Peg. A number of academic groups and individual contributors have agreed to run the Sidechain Elements Fed-Peg, including blockchain groups at Stanford, MIT, and Princeton. The sidechain does not include mining or proof-of-work at this point.
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(they have to use central servers as a shimmy)
Federated, not central:
The initial sidechain included in Sidechain Elements works on a federated security model; while it’s still peer-to-peer and consensus-based, security for the blockchain is provided by a set of predefined functionaries in an arrangement called a Fed-Peg. A number of academic groups and individual contributors have agreed to run the Sidechain Elements Fed-Peg, including blockchain groups at Stanford, MIT, and Princeton. The sidechain does not include mining or proof-of-work at this point.
https://blockstream.com/2015/06/08/714/