In the bitcoin world, there has been a lot of talk about the upcoming Lightning Network. This branch of development is designed to allow high-speed bitcoin transfers and open up a payment channel for microtransactions. A similar thing exists for Ethereum, called the Raiden network. It is time to check out what Raiden is all about and how it will change the fate of the Ethereum altogether.
The Raiden Network Has A Lot of Promise
Although Ethereum is not designed to be a payment system that can compete with bitcoin, the Raiden network may change all of that. This new protocol will introduce high-speed asset transfers for the Ethereum network and focuses on the key pillars of growth that hold bitcoin back right now. It takes mere seconds – or even fractions of a second – to confirm transfers over the Raiden Network, which is quite a significant improvement.
More importantly, scalability is one of the primary selling points of the Raiden network. This protocol can handle over 1 million transfers per second without running into any problems. That would be quite a significant breakthrough, as such a high number of transactions can become a serious threat to existing financial payment networks, all of which are more expensive to use. Speaking of which, the Raiden network is designed to facilitate low transaction fees, which could be 7 orders of magnitude lower when compared to blockchain transactions on the current Ethereum network.
Some people may have already guessed how the Raiden Network is not unlike bitcoin’s Lightning Network. Rather than sharing all transactions on the blockchain, Raiden allows users to privately exchange messages to sign the transfer of value. Moreover, this protocol is an extension to Ethereum, complementing the existing ecosystem and making it stronger. All of this is made possible thanks to a network of peer-to-peer payment channels and deposits.
Mainstream applications for the Raiden network are not hard to find either. Cryptocurrency-based microtransactions have been a goal of bitcoin developers, yet the Ethereum team may beat them to the punch. That does not have to be a bad thing, as it will allow both developer communities to learn from one another and make improvements moving forward. The Lightning network is not expected to go live anytime soon, whereas Raiden will become a part of the Ethereum ecosystem as early as next month.
Other applications for the Raiden Network include decentralized markets, new token systems, and decentralized exchanges. Especially this latter aspect is quite interesting, as centralized exchanges have even the “gatekeepers” to the cryptocurrency world for quite some time now. That has always struck some people as odd, considering Ethereum and bitcoin and both decentralized ecosystems. With the introduction of the Raiden network, that situation may come to change sooner rather than later. In fact, the first decentralized exchange on the Raiden Network, called raidEX, is already in development as we speak.
Rest assured the developers of the Raiden network are already looking past the initial release of this protocol. Version 2.0 of the protocol will feature better privacy, lower latency, and increase the scaling properties beyond token transfers. Although this project was initially expected to be released at the end of March 2017, developers mentioned it will be pushed to an early April release date. So far, the MVP release is 65% complete, according to GitHub.
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