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.

Some are also trying to scale Ethereum on the chain instead of with an intermediary payment system – for example, projects such as zk-SNARKs and Plasma.

"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." ®


Other stories you might like

  • Investors start betting against Bitcoin with short-trade products
    Some crypto-bros keep the faith in the face of market onslaught

    ProShares, the issuer of exchange-traded funds with around $65 billion under management, has launched the first short Bitcoin exchange-traded product in the US, offering a way for investors to make money from the ongoing cryptocurrency meltdown.

    Dubbed the ProShares Short Bitcoin Strategy, the ETF is set to launch on the New York Stock Exchange under the ticker BITI. Bitcoin declined to $17,601.58 over the weekend, according to Coin Metrics. It has lost 70 percent of its value since last November's highs.

    Speaking to the Financial Times, Nate Geraci, president of wealth management firm The ETF Store, said there would be "a rather robust market" for the short funds.

    Continue reading
  • Singapore promises 'brutal and unrelentingly hard' action on dodgy crypto players
    But welcomes fast cross-border payments in central bank digital currencies

    In the same week that it welcomed the launch of a local center of excellence focused on crypto-inspired central bank digital currencies, Singapore's Monetary Authority (MAS) has warned crypto cowboys they face a rough ride in the island nation.

    The center of excellence (COE) was established by the Mojaloop Foundation – an open source effort to create payment platforms to make digital financial services accessible to those without access to banks. The COE aims to "accelerate financial inclusion in emerging markets" through hackathons, workshops and pilot projects while examining expanded CBDCs payment capabilities."

    Singapore's sovereign wealth fund has invested in Mojaloop, and MAS chief fintech officer Sopnendu Mohanty serves as a board advisor and the authority provides representatives to the Foundation's working group, alongside folks from the Bill & Melinda Gates Foundation, Google, and more.

    Continue reading
  • Coinbase CEO cuts 1,100 jobs, warns of 'crypto winter'
    The buck stops with me, says Armstrong, but I still have a job

    Coinbase has axed 1,100 employees, cutting its workforce by 18 per cent, while the value of digital assets including Bitcoin plummet amid rising inflation rates in the US.

    CEO Brian Armstrong announced on Tuesday he was "making the difficult decision to reduce the size of [the] team ... to stay healthy during this economic downturn." As the largest US cryptocurrency exchange, Coinbase employed about 1,250 employees at the start of 2021, when novel blockchain-based technologies such as NFTs and stablecoins exploded, launching the current Web3 hype to new heights.

    But the glowing promise of getting rich from trading cryptocurrencies or cartoon apes is losing its shine, spelling bad news for Coinbase. Armstrong warned of a "crypto winter" as America looks set to enter a recession.

    Continue reading
  • Crypto market crashes on Celsius freeze, inflation news
    Not a good moment to look at that digi-coin portfolio, fam

    The cryptocurrency world is experiencing what can only be described as a meltdown, with prices plummeting today to lows not seen since the end of 2020.

    The plunge is likely due to several factors including general economic uncertainty as seen in the stock market, inflation, bearish conditions and loss of confidence in crypto-coins, and scared money and bots being spooked by whales selling.

    It definitely did not help that crypto-lending biz Celsius Network put a freeze on withdrawals, swaps, and transfers Sunday night. Soon after Bitcoin tumbled 10 percent, Ethereum lost 19 percent of its value, and fan-favorite Dogecoin shed nearly 15 percent of its value, or about $0.01, since then. 

    Continue reading

Biting the hand that feeds IT © 1998–2022