SEPoW: Secure and Efficient Proof of Work Sidechains.

Since the advent of sidechains in 2014, they have been acknowledged as the key enabler of blockchain interoperability and upgradability. However, sidechains suffer from significant challenges such as centralization, inefficiency and insecurity, meaning that they are rarely used in practice. In this paper, we present SEPoW, a secure and efficient sidechains construction that is suitable for proof of work (PoW) sidechain systems. The drawbacks for the centralized exchange of cross-chain assets in the participating blockchains are overcome by our decentralized SEPoW. To reduce the size of a cross-chain proof, we introduce merged mining into our SEPoW such that the proof consists of two Merkle tree paths regardless of the size of the current blockchain. We prove that the proposed SEPoW achieves the desirable security properties that a secure sidechains construction should have. As an exemplary concrete instantiation we propose SEPoW for a PoW blockchain system consistent with Bitcoin. We evaluate the size of SEPoW proof and compare it with the state-of-the-art PoW sidechains protocols. Results demonstrate that SEPoW achieves a proof size of 416 bytes which is roughly 123x, 510x and 62000x smaller than zkRelay proof, PoW sidechains proof and BTCRelay proof, respectively.