In technical terms, one of the mechanisms that is commonly used by sidechains is called a two-way peg. This mechanism lets you transfer assets to and from sidechains and, in the process, transform vanilla assets into all other flavors that you can imagine.
Let's look at doing this using the example of cryptocurrencies, where a two-way peg lets us transact Altcoins, such as Litecoin, at a fixed rate. This means that you can take two Bitcoins from the parent or main chain and purchase two Litecoins on the sidechain at a 1:1 fixed rate. Those Litecoins can be sent to someone on that sidechain, and then he or she can redeem them at the same 1:1 rate on the parent chain and receive back two Bitcoins.
This works as follows, ...
