The idea behind sidechains is that they will allow multiple blockchains to work with one another, as opposed to traditional cryptocurrencies where each blockchain is independent. As such, sidechains are a key component of third generation blockchains in that they enable interoperability. An asset on one blockchain would be able to be moved to another and back without going through a counterparty.
Sidechains are being developed for use in Cardano, a third generation blockchain being designed and built by IOHK.
Watch the whiteboard below: