Microraiden Payments Channel Launched on Ethereum Channel
µRaiden – known more commonly as “microraiden" is a micropayment technology has finally gone live on the Ethereum blockchain in a big boost towards solving the scalability issues of the Ethereum blockchain.
For Ethereum network to grow further, it has to overcome its major underlying issue that is the inability to quickly process a large number of transaction on the network. The existing process is quite lengthy and time-consuming causing severe delays in the payment transactions. For every transaction done on the network, it needs to get verified by each and every node. This means that if the network consists of a large number of nodes or has to process a large number of transactions, it will take a lot of time.
In order to solve this issue about the scalability of the network, the development team at Ethereum has proposed building a full-scab Raiden network quite similar to the Bitcoin’s Lightning network. The Raiden network will be built as a second layer on the Ethereum blockchain. In this second layer, several participants can create a new payments channel while allowing them to send Ether or ERC-20 compatible tokens and transact at a lower cost.
µRaiden is a unidirectional payments channel that allows sending tokens to the pre-determined receivers. As this process is functional in the second layer build atop the Ethereum blockchain, it will not be recorded on the public blockchain but still remains secured by the Ethereum network.
In its open repository µRaiden says “Clients (subsequently called “senders”) wanting to access a provider’s payable resources, will open a micropayment channel with the provider (“receiver”) and fund the channel with a number of tokens. These escrowed tokens will be kept by a third party contract that manages opening and closing of channels.”
Payments through Microraiden is simple wherein the sender locks the funds, opens an intermediate channel and begin transacting with the pre-determined receiver. Each transaction has a digital signature. Once you close the channel, the network nodes on the Ethereum blockchain will just have to check the single signatures before distributing the funds.
On Github, the developers wrote that now with Microraiden launched on the Ethereum mainnet, "This allows developers to start building Microraiden-based applications.” Lefteris Karapetsas - one of the members of the development team wrote that for now a limit has been placed on the maximum Raiden tokens (RDN) that can be deposited for making payments. He wrote "This is a bug bounty main net release. We recommend using only small amounts of RDN as channel deposits. To that end, we have limited the maximum deposit to 100 RDN.”
However, note that Microraiden is just one of the important steps in building the Raiden network and the development is still working on a full-scale solution for the scalability issue. Ethereum co-founder Vitalik Buterin has also proposed the use of sharing technology for achieving Visa-level scalability with its proposed implementation to be done in 2019.