It’s no secret that an Ethereum transaction can be quite slow and time-taking. The Raiden Network aims to solve the issue at hand. The underlying problem of this is Ethereum’s scalability. Currently, Ethereum can only process 15 transactions per second. Even though the hypothetical possibility for the transaction of a single Ethereum node is over 1000 transactions, the existing gas limits lower the figures significantly. Raiden seems to be the solution for Ethereum’s low scalability.
As of now, Ethereum is the second most used cryptocurrency in the world, which why it is likely there will be a future where we might use Ether to purchase commodities like chocolate bars to expensive cars. But, for this to become a reality, Ethereum has to shorten the transaction time exponentially. The synthesis of Ethereum and Raiden will make Ethereum blockchain astonishingly fast.
The basic idea of the Raiden network is to avoid the bottleneck of blockchain consensus. This is done by leveraging a network of payment channels that allows it to securely transfer value off-chain; without involving blockchain for every transaction.
Raiden will aim to solve these problems:
- Raiden will use a mix of meshed payment channels, deposits for secure token transfers, but these transfers will be off-chain.
- Instead of utilizing blockchain as a global notary for all transfers, the blockchain will only be used as a system for settling netted claims, which resulted from off-chain transfer activity. This approach will allow Raiden to scale with the numbers of users and their transfers daily exponentially.
- Transfer’s will be extremely cheap, fast, and private.
- The Raiden Network will complement Ethereum blockchain such that it can become a global scale payment infrastructure for everyday purchases.
Ethereum’s Raiden is a payment network that is built on top of the Ethereum blockchain network. Raiden comes intending to provide an easy to use conduit for off-chain (outside the Ethereum’s blockchain) payments without relying on the trust of two or more parties involved.
The idea is to broadcast transactions on the blockchain only during settlements, and not waste time broadcasting individual transactions of each party. To make it easier, think about this as a ‘bar tab’ where you pay at the end of the day instead of paying every time for each drink you order.
So, by using this off-chain payment network in place to settle blockchain for each transaction, an individual can instantly send fiat currency or cryptocurrency in high volume and settle the deal on Ethereum Blockchain when the parties decide to close their trade.