...by Daniel Szego
"Simplicity is the ultimate sophistication."
Leonardo da Vinci

Thursday, October 4, 2018

Strategical roadmap of payment and state channels

Strategical roadmap of different payment and state channels of the Ethereum and Bitcoin stack can be seen on the previous picture. The major categories are the followings: 
- simple payment channels are integrated with Bitcoin or Ethereum and provide the possibility to exchange off-chain tokens between two nodes. 
- lightning network is routed payment channel implementation on Bitcoin, providing the possibility to send transactions between multiply nodes even if they are not directly corrected. 
- micro Raiden is a non routed state channel for transferring ERC20 tokens off-chain and integrated with Ethereum. In micro Raiden multiply 'client' nodes are connected with one common 'server' node. 
- Raiden is a routed state channel for transferring ERC20 tokens off-chain and is integrated with the Ethereum stack. 
- Plasma is a special protocol based on the same ideas. It integrates Ethereum smart contracts with other blockchains. As an example part of the business logic might run on the Ethereum live chain, part of it only on an Ethereum proof of authority chain. 

General state channel implementations are not common at the moment. Perhaps the reason is for that, that cryptoeconomical incentive mechanism can not necessarily used in this case because we do not know what will be implemented by the smart contract.