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Microraiden Payments Channel Is Released on the Ethereum Network

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by Bhushan Akolkar · 3 min read
Microraiden Payments Channel Is Released on the Ethereum Network
Photo: tiendientu vietnam / Flickr

Microraiden Payments Channel goes live on Ethereum network, an important step towards the scalability of Ethereum blockchain.

Ethereum’s micro-payment system – known as Microraiden –  that is based on the Raiden technology, is now finally live on the main Ethereum blockchain network. Microraiden payments channel is a solution similar to Bitcoin’s Lightning network that allows users to conduct instant micro-payments directly between each other.

The Raiden network is developed as a solution to the scalability issues of Ethereum and exists as a second layer atop the Ethereum blockchain. This second layer allows participants to create payments channel which makes easy for users to send Ethers or ERC-20 compatible tokens at a relatively lower cost.

One of the underlying issue with the Ethereum network is the inability to quickly process a large number of transactions. In the existing process, for each transaction on the Ethereum network, it needs to get verified by each node on the network. This means that if the network possesses a huge number of nodes or multiple transactions at a time, it is going to take a lot of time for the transactions to go through.

Instead of using bidirectional token payment channels employed by the Raiden Network, µRaiden will use unidirectional payment channels to enable quick and free payments between two users. The feature will allow system participants to charge for their services on a pay-per-use basis.

Microraiden has some of the very potential and diverse applications like scanning RFIDs to track shipments as a part of supply chain management or even downloading the content from the internet. Users can use one-way Microraiden payment channels which they can open and close on the Ethereum network itself.

The process is simple to start with locking your funds, create an intermediate channel and initiate your transaction to the desired party. Every transaction on the Ethereum network will get a digital signature. At the end, once the user closed the channel the nodes of Ethereum network need to check only a single signature before distributing the funds. Tihs shows how Microraiden payment channel makes complex transaction process simpler and faster.

The development team at Ethereum has build tools for decentralized application developers (dapp) making it easy for them to build the payments channel. Back in September 2017, the team wrote: “Talking to dapp developers, we noticed that many of them just want to use the Raiden Network as a robust many-to-one payment channel system; one service provider offering services to many recurring customers.”

Developer Lefteris Karapetsas wrote on the Github platform that the version being currently released is aimed at solving bugs within the code. He also said that the maximum limit on the use of Raiden tokens (RDN) is being put currently. “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.”

This is certainly one of the important signs of progress towards solving the scalability issues for the Ethereum Network. Such execution of such micro-payment network certainly paves the way for developing and enhancing the network and will reduce complexities features within with full-scale Raiden launch.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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