RAIDEN NETWORK

The Raiden Network refers to an off-chain scaling solution that aims at fostering payment schemes that are near-instant, cheap, and highly-scalable within the context of the Ethereum blockchain. By comparison, it is not unlike Bitcoin’s Lightning Network.

The Raiden Network allows for secure transfers of coins between blockchain participants despite not getting a global consensus. This is performed through the use of transfers that are usually signed digitally and are hash-locked. These are called “Balance Proofs” which are fully-collateralized and were set-up prior by on–chain deposits. 

The concept in which the Raiden Network operates under is called “Payment Channel Technology”. This is practically unlimited, composed of bidirectional transfers between two participants provided the net sum of transfers stay within the amount of deposited tokens. Such transfers may be performed in an instant, without having to involve the actual blockchain itself. The only time that the blockchain would be included is upon the conduct of the initial one-time on-chain creation and the apparent close of the channel.