12 Oct 2017
Raiden is a highly anticipated open-source project which started in 2015, shortly after the market adoption of Ethereum. The goal of the startup is to solve the scaling issues of Ethereum by creating a solution that allows two agreeing participants to perform unlimited, bidirectional transfers without going through the blockchain for every transaction.
An overview of the functionality can be summarized by the following:
1) Creation of binding agreements called balance proofs by using hash-locked transfers.
2) Establishment of payment channel technology which is an off-chain contract between two parties. The two parties can perform almost unlimited and low cost transactions between each other instantly. The only time in which the blockchain is involved is through the initial on-chain creation of the contract and the final closing of the channel.
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