Raiden Network Aims To Solve Scalability Issues with Cryptocurrency Transactions

Raiden Network Aims To Solve Scalability Issues with Cryptocurrency Transactions

If the Bitcoin Civil War proved anything, it’s that scalability is a major issue for users who want Bitcoin to fill its promise of making transactions both cheap and fast.

Bitcoin isn’t really ready to compete with credit cards yet because there’s a terrible transaction backlog and the fees are getting too high to really do a good job of competing with Western Union.

The Raiden Network aims to bypass the need to create on-chain scaling options by creating new off-chain solutions that effectively add layers to the blockchain network and move the responsibility of scaling away from the blockchain layer. The value of the Raiden Network Token recently jumped by more than 31%.

Buy A Cup Of Coffee

One of the big “acid tests” of whether a cryptocurrency stands a chance of being integrated into everyday transactions is whether someone could pay for their latte at their favorite café without having to pay ten times what the latte is worth in fees. Because that isn’t true for Bitcoin anymore, people are starting to take a serious look at alternatives like DASH.

By moving the scalability issue away from the blockchain layer, however, users who want to make small transactions no longer have to compete for space in blocks. The blockchain only needs to log that a transaction occurred. The Raiden Network layer – call it a “transaction layer” for a blockchain network if you like – handles the actual processing of that transaction.

Big deal, right?

It’s easy to say that the size of the blocks in the Bitcoin blockchain just need to be increased but, as we saw with the Segwit2X failure, it’s a lot harder to get cryptocurrency developers and miners to agree that block size needs to be increased.

Raiden aims to take the job of processing transactions away from the blockchain layer to improve scalability and return to the days of low fees and swift transactions. That means you can pay for your coffee quickly without having to worry about paying through the nose in fees.

*Make Money with Cryptocurrencies Here

Why Does This Need To Be Multi-Layered, Though?

The Raiden team might have been inspired by the standard OSI network model, in which the application layer is the one that is supposed to present data in a meaningful way, but isn’t responsible for packaging and sending that data over the network.

Blockchain could be called the application layer that is responsible for storing and presenting data. Raiden’s additional layering aims to manage DApps that incentivize cooperation through micropayments, enable instant token swaps, and make retail payments more feasible in situations where the consumer isn’t buying expensive jewelry or a new car.

If this sounds like a little bit of shuffling around of resources, then it probably is for the sake of making the process of adding data to the blockchain more organized.

The OSI networking model is mostly meant to make it easier to categorize protocols that make it possible for a network to function and point at the steps that a computer takes to prepare data for transport over the network, which makes troubleshooting easier.

What an app like Raiden really does is return blockchain to its primary function of storing transaction data while moving the job of processing that data away from the blockchain. That means fewer arguments about block size and more discussions about how to make data processing more efficient while still keeping the data secure.

Token Sale Recently Concluded

Raiden Network closed its token sale on November 8 and it’s fairly promising that the value of the token continues to rise. It may be that cryptocurrency users recognize the value of moving scalability away from the blockchain layer and toward a layer that is purely responsible for processing transaction data. That way, blockchain-based systems don’t have to put up with having data processing and data storage on the same layer when these two functions can essentially be placed in their own containers using separate protocols.

Raiden’s roadmap does look attractive and, as its blog on Medium noted, no one wants to wait more than a second for a transaction to be confirmed. This is one of the biggest complaints with Bitcoin right now.

A lot of people who want to actually do business using cryptocurrencies and blockchain are jumping to other cryptocurrencies with lower fees and faster transaction times because Bitcoin isn’t ready to compete with credit cards.

The Raiden Network aims to take the scalability problem away from the blockchain layer by adding a transaction layer that is responsible for actually processing transactions.

Thanks for reading!

There are Fortunes Being Made Every day with Bitcoin and Cryptocurrencies – Watch Video Here    

 

~

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.