The Raiden Network is a kind of scalable solution focused on OTC networks. This provides an opportunity to receive instant payments with low commission and scalability of transactions. The platform is the complement and expansion of the Ethereum project, fully compatible with cryptocurrencies that meet the ERC20 standards. Currently, The Raiden project is under development, and its the main goal is to use all the advantages of the technology of state channels, protocols and integration options in practical applications.
Raiden project basic information
The Raiden Network is an analog of the Lightning Network and Ethereum’s product. It provides users with the possibility to conduct fast (instant mostly) cash transactions at a low commission level, as well as providing scalability and confidentiality.
The platform provides clients with an advantage to carry out transactions without reaching a global consensus. Thanks to the personal digital signatures use, transfers with hash blocking, fully protected deposits installed on the platform earlier. In the Raiden project, it is called payment channel technology. Thanks to this technology, it is easy to make a great number of bilateral payments, provided that the amount of conducted transactions doesn’t exceed the number of deposited coins. By using this technology, the speed of transactions is greatly increased, performing almost instantly. The initial Blockchain platform is only used for the opening of the transaction channel and its subsequent closing upon the payment confirmed.
The binding agreement, fixed by the Ethereum Blockchain network, is presented in the system as confirmation of the current balance. Due to the use of personal digital signatures, it is possible to refuse to conduct a transaction, provided that the channel is opened by at least one of the participants in the transaction. The proof of the current balance of the account is carried out as an operation in the general Blockchain network, and no one, except for the participants in the transaction, can access the entered tokens within the smart payment channel contract.
For fast and reliable payments, an advanced network protocol is used. It works as follows. During the opening of the payment channel, transactions and other transfers between users are conducted within the framework of the common Blockchain platform. Creation of direct channels of payment, in this case, is impossible. For most operations, there is no need to use a direct payment channel. To open it you will need a route, which is set by one of the private traders. Innovative Raiden network uses modern routing protocols with the ability to block the transmission of information about payments and open direct channels.
The functioning of the payment channel network in comparison with the Blockchain transactions does not provide for any fees. At the same time intermediaries within the extended network may be required to pay moderate commissions for the provision of services for the implementation of transactions based on their open payment channels – this creates a complex routing and competition in the market fees for the payment channel. The use of the Raiden protocol facilitates the market’s ease by using both protocol-level functionality and additional support services.
Technological base of the Raiden Network project
The infrastructure of the Raiden Network system involves overlaying the Ethereum Blockchain layers, which involves using a simple idea and a complex basic protocol in a specific interpretation. The platform allows users to use a simple application to develop separate products with decentralized management.
Retail payments in Raiden Network
Actually based on Ethereum, an impressive amount of projects have been created for working with cryptocurrencies, one of which is the Raiden Network. Its functionality allows the project to expand the effective Ethereum network with the scalability of technology and the competitiveness of fees charged.
Scalability indicators and the decentralized management system of the Raiden Network allow users to interact with each other on the basis of transparency, security, and confidentiality. P2P-payments are the most popular type of transactions among users of the cryptocurrency world products.
Raiden Network 101 system
For normal scalability of chains of Blockchain general system, a global consensus is required to ensure order and result in transactions. In this case, each participant in the operation must be informed of each update. Bandwidth limits and hardware restrictions determine the possible amount of updates per single second – this indicator is used to operate the decentralized platform. The main goal of the project is to achieve normal Blockchain network bandwidths, which is provided through the use of transaction channels with the secure portability of funds outside the framework of a Blockchain system, namely, in the absence of blocking for each transaction.
You can find more information about the platform on GitHub – https://github.com/raiden-network/raiden/?fref=ts. Here everyone can get access to the source code and conduct its audit.
Using the Raiden platform
The main application of the Raiden Network project is making payments within the platform. For today, in the system there are funds in the amount of about 2 trillion US dollars – the yield indicators of the platform are growing every day.
Raiden Network privacy
The work within the Raiden Network is carried out outside the framework of the Blockchain, which implies enhanced confidentiality of user data. Data of payment channel balances are hidden from the network participants until the agreements are approved. For all the complexity of routing, OTC Raiden Network transmissions allow using the system’s functionality to provide paid rebalancing services and obfuscation of payment channel balances to increase the level of confidentiality. Traffic protection is provided at the data exchange level, which prevents DoS attacks.
More detailed and up-to-date information about the project can be found on the official website of Raiden Network – https://raiden.network.
Advantages of the Raiden Network
We can highlight following key features and advantages of the Raiden Network project:
- All transactions in the system are carried out by using the processing power of operations. The size of commissions depends on the same indicator. This allows transactions to be optimized for the transfer of medium and large amounts of cryptocurrency, and also excludes overpayment in the implementation of micropayments;
- No limits for operations;
- Instant execution of transactions;
- Solving the problem of scalability;
- The Raiden Network token cannot be affected by the inflation due to the basis of the ERC20 algorithm;
- Providing RDN token holders with ample opportunities for work;
- Ensuring the liquidity of the system by using the full version of the Raiden client;
- Collection of commissions and other payments in local currency, which provides a stable demand for the tokens of the Raiden Network system.
RDN tokens: cryptocurrency cost, ICO specificity
RDN tokens are an internal exchangeable coin of the Raiden system. This cryptocurrency is a decentralized coin, fully compatible with the ERC20 standards and used in the work within the platform.
ICO was held in the format of a Dutch auction, in which the price of RDN tokens was fixed and was 0.0021906 ETH per one coin. Distribution of 100 million released RDN coins is made according to the following scheme:
- 50 percent is allocated for needs of an open auction;
- 34 percent is allocated to the Raiden Network project;
- 16 percent goes to the reserve of the Foundation for External Development of the project.
The original ICO format with a fixed token cost allowed users to invest in a project without a race at a bargain price.
To acquire and work with RDN tokens user must be the owner of the cryptocurrency wallet compatible with ERC20, the list of which includes a large number of popular clients, both mobile and desktop.
During the ICO and during the development of the project, Raiden Network developers did not involve the Ethereum Foundation funds in the system. Also, there was no preselling of RDN tokens, and during the main stage of sales, the Raiden Network project fund received an infusion of more than 30 thousand ETH.
Prospects for the Raiden Network project
If we talk about the prospects and rationality of investing in the Raiden Network, it should be noted that the Raiden Network service is a progressive system for conducting transactions with cryptocurrencies. Its functionality can be used both for working with ETH and with other altcoins that meet ERC20 standards. According to the experts of the cryptocurrency market, in the fall of 2017, Etherscan platform demonstrated the following indicators: more than 9 million ERH cryptocurrency wallets and more than 9,000 smart contracts, and this with a daily growth of these indicators. Such an overload of the system can lead to further malfunctions in the network. Expanding its functionality through similar projects will relieve the main Blockchain network and give users a lot of new opportunities.
Raiden project conclusion
In conclusion, we can say that the Raiden project uses the functionality of transactions channels to carry out bilateral cryptocurrency transfers with direct connection of participants. Also, the platform provides a specific protocol for the transactions through the option of payment channel routes, using the network topology when there is no need to connect each of the participants. Protection of operations with cash is provided through the use of a method of cryptographic data encryption, which ensures the guarantee of a successful result or absolute rejection by all participants of the operation.
Raiden Network’s focus is characterized by the integration of innovative technologies and developments into the system, which allows users to conduct instant, cheap and secure transactions in a confidential environment. At the same time, the product meets ERC20 standards and is compatible with popular cryptocurrency systems of the digital market.