Loose-change payment network Microraiden launches on Ethereum
Might speed up the blockchain, but aren't they about cutting out the middle man?
A new micropayments technology called Microraiden has launched on the Ethereum blockchain's main network.
Microraiden is one of the strategies to help solve a teensy-weensy problem with Ethereum – quickly processing a large number of transactions. Every time a transaction is made on the Ethereum network, every node of the network has to verify it, which can take a really long time if you've got a lot of nodes and a lot of transactions.
Instead, Microraiden is a one-way mini-payment channel that you open and later close on the Ethereum network. Applications could include scanning of RFID tags to track shipments as part of a supply chain, a smart fridge that orders milk when it's out, or downloading MP3s.
To use it, you lock in your funds, open the intermediary channel and start making transactions with the desired party. Every transaction gets a digital signature. At the end, you close the channel and the Ethereum network's nodes only have to check the single signatures before distributing the balances.
Now Microraiden has launched on the Ethereum mainnet. "This allows developers to start building Microraiden-based applications now," devs wrote on Github.
It's of course not the only micropayment system. Machinomy, for example, has been in development for a while and focuses on sending micropayments in Ethereum's currency, Ether, over HTTP.
Roger Wattenhofer, a distributed systems researcher at ETH Zurich in Switzerland, told The Register payment networks are "the best way" for scaling cryptocoins based on blockchains. "Micropayment networks in general should work well," he said.
But don't move so fast, some say.
One of the problems with off-chain payments, London-based Synechron Business Consulting consultant Matt Shaw said, is that payment solutions require making a deposit before the channel can be opened.
"This ties up liquidity and funding," he added, "undermining the benefits" for big payments.
He said Raiden has to "build systemic trust" by showing how their technology is secured outside of Ethereum.
At the moment, the initial Microraiden release restricts deposits to 100 RDN for testing and getting developer feedback. There's also a bug bounty going on if you find any gaping security holes.
Microraiden is part of a larger project under development, the Raiden Network, designed to handle bi-directional payments off Ethereum.
"1-directional also has already many use cases, but for real payment networks you need to go bidirectional," Wattenhofer said.
Elliot Shepherd, VP of technology at identitii (which has a blockchain database), told The Reg: "I'm not sure what the take-up will be, but micropayments have been threatening to go mainstream for a decade and current blockchains just aren't built for that kind of load. There will be some use cases where this or the Lightning network on Bitcoin makes a lot of sense. I'm yet to see a successful one, though." ?