Ethereum
Scaling Ethereum: The Significant Role of State Channels
Payment transactions on the blockchain pose two fundamental problems: they’re slow and expensive. This is true even for well-known smart contract platforms like Ethereum, where each block contains information regarding contract code, account balances, and contract storage. By taking signed transactions off-chain, not only can we solve the problems of speed and efficiency, but we can also offer increased security and user protection.
Enter: state channels.
Contrary to what the name might suggest to non-tech laypeople, state channels have nothing to do with the state (re: the government). Essentially, a state channel is a type of payment channel that occurs off-chain, but they’re really so much more than that. State channels work by providing a two-way pathway between two users that is completely private and unknown to outside its participants. The transactions made between these users are signed with a private key to ensure they are authentic.
Further, and perhaps most importantly, channels remain live only as long as they are needed. Participants can opt to close their channel when they’re done using it. Once closed, the transaction history can be uploaded to Blockchain, relieving the burden of recording every single transaction between two users, and instead retaining only the final outcome. Only one user is required to close a state channel. However, in the event of dispute, the user with the most recent transaction history will always prevail.
Think of it this way, state channels are similar to two parties signing a legal contract. You expect everybody to abide by the rules of the contract. However, if someone breaks the rules, you take them to court, and that court is the Blockchain. Not all contract disputes go to court and sometimes the threat of a court proceeding is enough to keep people in line. Additionally, because the “Blockchain court” is not a human being and thusly not susceptible to manipulation, the ruling is always fair. To that end state channels are the closest thing we have to a self-policing payment system. Right now, the Blockchain court is over-saturated with every single transaction between users, and that poses a problem for scalability, which brings us to our next metaphor.
Another way to think of state channels is to compare it to email, making on-chain payments the equivalent of that weary trip to the Post Office, where you have to buy a stamp, wait in line and then wait some more for your letter to arrive. By solving most of the problems of snail mail, state channels can offer the one very important thing on-chain payments can’t: scalability. The line at the Post Office can only get so long before someone says, “F*ck it,” you know? To put it in more literal terms, on-chain payment systems can only process 15 transaction per second, whereas a company like Visa does over 400,000. If digital currency is going to compete with credit (and the world), it needs to move faster and state channels make that happen.
In the absence of state channels, many would see no reason not to throw out the proverbial baby (Ethereum) with the bathwater and build another Blockchain entirely. But that’s not how technology advances. Instead, you leverage pre-existing innovation, and that’s precisely what state channels have and will continue to do with the Ethereum Blockchain. It pushes the Ethereum ecosystem forward instead of to re-inventing it. Even more exciting is the fact that state channels could act as a bridge between other pre-existing blockchains, but that research still needs to be done. So who are the good folks doing that research? It’s companies like SpankChain, L4, Connext, Loom, Celer and FunFair.
As thought leaders in the space, L4 has received a $1.5 million grant from the Ethereum Foundation and recently released a white paper on generalized state channels. The thing is, there’s a lot of white papers out there and a lot of theory, but less being done about implementation and ways to solve market problems. SpankChain is arguably the leader in that space, don’t let the cover of adult fool you. These guys and girls are the only production state channel deployment with a growing user base. Starting in spring 2018, SpankChain partnered with Connext to implement next-gen state channels. Celer and Loom have launched more recent projects, and we’re excited to see where they go. FunFair is the most secretive of the bunch. They have a working version of their gaming-focused “fate channels,” available on the Ethereum test network.
State channels are similar to Bitcoin’s Lightning Network, however the differences speak more to the differences between Ethereum and Bitcoin. Ethereum uses an account based model so the data that makes up the channel can be the “state” of anything from micropayments, a player’s score in a game, to an amount of bandwidth consumed and so forth. The Lightning Network is optimized for just updating account balances. The added advantage of Ethereum state channels is the ease of programmability which allows for some pretty mind bending logic like “counterfactual instantiation.” In this scenario, the smart contracts that maintain a state channel actually never get deployed unless there is a disagreement between the two parties. This allows state channels an easy upgrade path.
If it wasn’t clear by now, state channels stand to benefit all projects in the Ethereum community. Accommodating more users is the ultimate win-win, as it drives down user fees without disrupting the profit margin of miners. Plus, state channels will distinguish Ethereum from other blockchains whose payment systems are still living in the Dark Ages, and endow ETH with the practicality that comes with scalability. Further, there’s no technical unknowns here. State channels are functionally sound, but implementation and user experience will be the key to near-term cryptocurrency adoption. And that’s really what it’s about at the end of the day: breaking into the mainstream. If there’s a limit on the number of transactions, especially if that limit is as paltry as 15 per second, Ethereum (and all cryptocurrencies) will remain the Internet’s lemonade stand and not the new economy it can be and will become.
Kevinsam
April 29, 2023 at 9:31 AM
Passive Income – Effortlessly
With our help, you can earn money just by sharing your Internet.
Start earning right now
You get a $5 gift when you register!
https://bit.ly/3GXAk2k
Jeffreynum
May 21, 2023 at 4:40 AM
Наш сайт “Кулинарные тайны” – это уникальный ресурс, который поможет вам приготовить самые вкусные блюда для себя и своих близких. Мы собрали в одном месте лучшие кулинарные рецепты на любой вкус – от простых и быстрых до сложных и изысканных.
Наши рецепты подойдут как для начинающих, так и для опытных кулинаров. Мы подробно описываем каждый шаг приготовления, даём полезные советы и рекомендации по выбору ингредиентов и способам приготовления.
Кроме того, мы постоянно обновляем нашу коллекцию рецептов, чтобы вы всегда могли найти что-то новое и интересное для себя. У нас вы найдете рецепты мясных и рыбных блюд, супов и закусок, десертов и выпечки, а также многое другое.
Мы уверены, что наш сайт станет вашим надежным помощником в кулинарных делах. Приготовьте вместе с нами самые вкусные блюда и порадуйте своих близких и друзей!
Рецепты –
fgjhjhjhngf
Michaeljop
May 21, 2023 at 9:44 AM
Наш сайт “Кулинарные тайны” – это уникальный ресурс, который поможет вам приготовить самые вкусные блюда для себя и своих близких. Мы собрали в одном месте лучшие кулинарные рецепты на любой вкус – от простых и быстрых до сложных и изысканных.
Наши рецепты подойдут как для начинающих, так и для опытных кулинаров. Мы подробно описываем каждый шаг приготовления, даём полезные советы и рекомендации по выбору ингредиентов и способам приготовления.
Кроме того, мы постоянно обновляем нашу коллекцию рецептов, чтобы вы всегда могли найти что-то новое и интересное для себя. У нас вы найдете рецепты мясных и рыбных блюд, супов и закусок, десертов и выпечки, а также многое другое.
Мы уверены, что наш сайт станет вашим надежным помощником в кулинарных делах. Приготовьте вместе с нами самые вкусные блюда и порадуйте своих близких и друзей!
Рецепты –
fgjhjhjhngf
gateio
June 2, 2023 at 3:34 PM
I may need your help. I tried many ways but couldn’t solve it, but after reading your article, I think you have a way to help me. I’m looking forward for your reply. Thanks.
gate.io kimlik doğrulama süresi
June 8, 2023 at 10:42 PM
This article opened my eyes, I can feel your mood, your thoughts, it seems very wonderful. I hope to see more articles like this. thanks for sharing.
Davidswelo
June 22, 2023 at 8:39 AM
clomid fertility drug
Ivyflerm
June 22, 2023 at 8:40 PM
amoxicillin tablet 500mg
Maryflerm
June 24, 2023 at 1:49 PM
aurogra 100 prices
Alanflerm
June 24, 2023 at 9:29 PM
lasix tablets 20 mg
Sueflerm
June 25, 2023 at 3:21 PM
antabuse 500 mg price
Ivyflerm
June 25, 2023 at 9:01 PM
amoxicillin discount
JosephHen
June 26, 2023 at 1:38 AM
order nolvadex uk
spravki-kupit.ru
June 26, 2023 at 2:39 PM
нужна медицинская справка
диплом о среднем образовании
June 27, 2023 at 10:51 AM
I blog quite often and I really appreciate your content. This great article has really peaked my interest. I am going to book mark your website and keep checking for new information about once a week. I subscribed to your RSS feed as well.
Jackflerm
June 27, 2023 at 3:37 PM
how to get clomid australia
Ivyflerm
June 27, 2023 at 9:56 PM
amoxil capsule 500mg
Ashflerm
June 28, 2023 at 5:31 AM
terramycin
Daviscob
June 28, 2023 at 12:16 PM
trazodone 50mg cost
Maryflerm
June 28, 2023 at 8:25 PM
lyrica pill
Daviscob
June 29, 2023 at 10:23 PM
amoxicillin 250 mg prices
Darrylsix
June 30, 2023 at 8:29 AM
bactrim ordering
SamuelNug
June 30, 2023 at 1:51 PM
paxil hair loss
Alanflerm
June 30, 2023 at 9:25 PM
erectafil 5
Ashflerm
July 1, 2023 at 5:48 AM
zoloft 100mg tablets no rx
Zakflerm
July 1, 2023 at 11:57 PM
buy zofran uk
binance conta aberta
July 2, 2023 at 10:36 AM
Thank you for your sharing. I am worried that I lack creative ideas. It is your article that makes me full of hope. Thank you. But, I have a question, can you help me? https://www.binance.com/pt-PT/register?ref=DB40ITMB
Ashflerm
July 2, 2023 at 5:26 PM
bactrim over the counter
bezogoroda.ru
July 3, 2023 at 10:01 AM
Can I just say what a relief to discover someone who truly knows what they’re talking about online. You definitely understand how to bring an issue to light and make it important. More people ought to read this and understand this side of the story. It’s surprising you’re not more popular because you surely have the gift.
чеки на гостиницу в санкт петербурге
July 3, 2023 at 5:45 PM
I’m not sure why but this website is loading incredibly slow for me. Is anyone else having this issue or is it a problem on my end? I’ll check back later and see if the problem still exists.
Maryflerm
July 3, 2023 at 7:14 PM
buy lyrica canada
Eyeflerm
July 3, 2023 at 8:29 PM
erectafil
купить чеки на гостиницу в санкт петербурге
July 4, 2023 at 12:50 PM
The other day, while I was at work, my sister stole my iPad and tested to see if it can survive a 25 foot drop, just so she can be a youtube sensation. My iPad is now broken and she has 83 views. I know this is completely off topic but I had to share it with someone!
online pharmacies in canada
July 5, 2023 at 10:35 AM
best pharmacy prices
online casino with real money
July 5, 2023 at 3:33 PM
whoah this blog is fantastic i love reading your articles. Stay up the good work! You understand, many individuals are hunting around for this info, you can help them greatly.
Darrylsix
July 5, 2023 at 3:34 PM
buying combivent online
online pharmacy review
July 5, 2023 at 5:44 PM
drugs from canada without prescription
Zakflerm
July 6, 2023 at 1:24 AM
zithromax 4 pills
medicin without prescription
July 6, 2023 at 4:57 AM
canadian pharmacies without an rx
daachka.ru
July 6, 2023 at 12:58 PM
Spot on with this write-up, I really think this website needs much more attention. I’ll probably be back again to read more, thanks for the information!
JosephHen
July 6, 2023 at 11:12 PM
buy lexapro australia
Daviscob
July 7, 2023 at 7:13 AM
acticin