What is the solution of the State Channel?

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The State Channel solution is used in the second layer of the blockchain and allows a group of participants to make unlimited private transactions off-chain. Of course, only channel participants can view these transactions and they are not publicly available. In reality, only the initial and final state of the transaction is recorded on the main blockchain. Since recording a few small transmissions is difficult and can slow down the entire system, a State Channel solution was used. This concept makes transactions safe, fast and cheap. It can be said that the state channel solution has high scalability potential in the near future.

Introducing a State Channel solution

A state channel solution refers to a two-way communication channel between two users or nodes in a network, or between a user and a service. This channel allows transactions that might occur on the blockchain network to take place outside the blockchain, thus reducing risk. For example, Bitcoin payment gateways are a well-known example of this strategy, allowing free instant payments directly between two parties; But what does the term state channel mean?

The term state refers to the state or condition of something at a particular time; While the term channel refers to the place where the communication takes place. Consequently, the state channel is a safe place where authorized interactions can be recorded and later published on the blockchain. Statskanalen is a cost-effective and private place to record interactions on the blockchain network. Also, cryptocurrency transactions are recorded in the blockchain network, which is maintained by thousands of users. Blockchain technology allows users to interact directly with each other and avoid trusted third parties.

Every new file created on the blockchain must first be registered, then shared and verified across the entire network. With thousands of transactions a day, recording and sharing transactions on the blockchain takes 10-30 minutes. The government channel is similar in concept to the Bitcoin Lightning Network payment channel. However, government channels support not only payments but also public status updates. As a result, the State Channel solution allows users to communicate directly with each other, eliminating the need to send any data to the blockchain.

What is a channel?

The Channel refers to peer-to-peer protocols that allow two parties to carry out a number of transactions between them and submit the final results to the blockchain. In addition, the channel uses the script to display the form of summary data from a previous series of transactions. The channels update the status, which is done and approved by the parties involved. It minimizes calculations at the block processing layer. In addition, this process reduces swelling and increases the speed of transfers.

What are the components of a state channel solution?

There are three main components to the state channel solution.

Update the channel

digital signature

Supply and delivery State

Transactions are created and signed so that participants can update the status between them. This information is only stored for a limited time and then sent to the blockchain. Each new update replaces previous updates. Digital signatures are used to lock parts of the blockchain state so that it can be updated when certain participants agree. Finally, participants must submit a request to the blockchain. This state channel will be closed and the state lock will be reopened after some time.

It is interesting to know that some groups of participants use the State Channel solution in situations where they completely agree with each other. In other words, there must be a consensus among the participants. These participants come together to sign off on a series of mutual transactions before submitting them to the blockchain. These transactions are locked with blockchain smart contract functions or require multiple signatures. Therefore, all participants must be in full agreement.

Also, updates among participants are done among themselves first. These updates are voided by the last transaction and cancel each other’s transactions. Finally, participants submit updated data to the blockchain. This closes the state channel and restores access to the locked data. After this process, the data usually have a different structure because they may have changed as a result of updates between participants.

What projects use the State Channel solution?

It is interesting to note that various projects use the state channel solution to implement scalability. These projects have the ability to participate in decentralized programs. In the following, we name some of the most important projects that use the state channel solution.

K channel



What are the characteristics of a state channel?

In the State Chanel solution, personal data. In fact, only those invited to the State Channel can access the data.

The interaction is immediate.

Connections are almost free. In fact, instead of paying each time to save data on the blockchain, only the results are saved.

The information is designed to be reliable. Any message digitally signed by any user indicates that they are authorized. If a user tries to cheat or leave the position at the same time, other users can reveal the state space that will limit the results allowed in the end.

There is little data in the state channel solution. In fact, it can be said that only the last written results are added to the blockchain, reducing the amount of shared data.

State channels may close early. Unlike blockchains, public channels have an expiration date or pre-set condition. In other words, users can end their channel early.

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