Scaling, the endless cycle - and Raiden Network - P.3

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With the addition of the Raiden Network, Ethereum may now be able to handle low-value, high-frequency payments, thus mitigating pressure on the blockchain system.

Scaling, the endless cycle - and Raiden Network - P.1

Scaling, the endless cycle - and Raiden Network - P.2

4. The advancement of the Raiden Network

Currently, “payment channel” has been studied and applied to Ethereum blockchain via the Raiden Network.

As we can see, it is infeasible and not optimal for each computer to establish a basic channel to connect each computer in one blockchain. But instead, with the solution from the Raiden Network, when A and D want to make payment to each other, they can utilize a network of payment channels from other pairs as described in the  picture below:

raiden network, blockchain, onchain, offchain, bitcoin, ethereum, lightning

A and D take a risk when their payments go through B and C’s channel. But, the managing mechanism of the smart-contract will only allow intermediate channels to collect their money after they have accomplished their responsibility. Participants will not be incentivized to steal from the others as they themselves are staking their own assets; and each transaction will be tracked by everyone, making the whole process relatively safe and secure.

Now, it is no longer necessary for users to compete against each other for a seat on the bus, instead, they will now only pay a small fee to “hitchhike” across other payment channels. And in return, only a small or medium transaction can be processed - but this option may be enough for a daily spending.

5. The value of the Raiden Network

Besides all the developed advantages of the Raiden Network, it’s obvious that disadvantages are inevitable.

Users do not want to “locked” a large amount of money in a single channel, especially because they will need to connect to multiple parties in order to resolve multiple types of transaction. But if the deposit is too small, a big payment cannot be settled.

However, as mentioned above, the current Ethereum speed and costs of processing are still deemed to be convenient for massive payments. With the addition of the Raiden Network, Ethereum may now be able to handle low-value, high-frequency payments, thus mitigate pressure on the blockchain system and increase possible daily cryptocurrency adoption.

6. In conclusion

It is essential for us to keep in mind that, the Raiden Network is not yet operational, and the token of the Raiden Network (RDN) has fallen out of top 100 cryptocurrencies by market cap. However, Raiden has been developed for more than 2 years, with millions of dollars invested. In March 2018, we have witnessed the launch of the Lightning Network of Lightning Lab, a solution which enables the use of Payment Channel on Bitcoin’s blockchain. Not to mention the Raiden Network is an open source solution - which means, this project may be forwarded or succeeded by other projects - this is a guarantee of a long-term vision for Ethereum and blockchain technology.

Written by nami.today

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