What Are State Channels in Blockchain?


The unprecedented level at which bitcoin gained traction in the last decade can make anyone ponder over its uniqueness and opportunistic nature. It is undeniably the fastest-growing technology that poses as a disruptive force in the traditional financial systems.

The prospects of increased credibility are significantly higher while executing certain tasks like recording transactions. Not only that, but it has also been able to build significant trust among the investors through its verified accountability.

The transactions are being conducted in the most dynamic fashion that they ever did in the past and continue to spread their benefits. The ability to successfully store and place tamperproof data is one of the predominant benefits users can leverage. Users can also access such data at their own convenience from any part of the world and at any good time.

Relevance of State Channels 

When it comes to state channels, the profuse amount of convenient features that they bring forth make them highly preferable among the users. It is a Layer 2 solution that works through blockchain and provides an incredible option to the participants to carry out unlimited transactions. Furthermore, all these private transactions remain completely off-chain, indicating the efficacy of using such a platform.

Whatever and wherever it may be, your transactions remain completely out of reach of governance systems. This is in sheer contrast to the conventional methods where transactions are made public as they are usually on-chain transactions. Only the users or participants will be able to view their transactions on the state channel. As far as the main blockchain is concerned, it records only the beginning and final phase of the transactions.

Any group of participants is entitled to conduct totally secured transactions through state channels which are considerably faster and low-cost in nature. It offers higher scalability, and the chances of completing a larger number of transactions per second become substantially higher.

Some of the predominant state channels include:

Lightning Network

It is a widely renowned Layer 2 technology usually incorporated in bitcoin and works around micropayment channels. In a bid to enable an efficient transaction, this network precisely scales the true capability of the blockchain. All the transactions conducted on this highly efficient network are considerably faster in tandem with lower costs. Such transactions also get a confirmation quite seamlessly as opposed to the ones which are conducted on-chain or through the bitcoin blockchain and cryptocurrency trading are much cheaper.

The lightning network was designed with the sole purpose of removing an increased pressure of the humongous number of transactions on the bitcoin blockchain. It helps in switching the transactions from the bitcoin blockchain and converts such transactions into off-chain, which also reduces the transaction fees to a significant level.

Celer Network  

Celer is a user-friendly layer 2 scaling platform that provides better quality applications on cryptocurrencies like Polkadot, Ethereum, etc. Such applications are faster, low-cost, and secured in nature. The prospects of mass adoption become convincing with the Celer network that incorporates Rollup technology.

It is also one of the few decentralized state channels that reinforces the entire apparatus of second-layer scaling. It becomes incredibly easier for the applications developed in this ecosystem to attract substantial traffic with the Celer network.

You also receive a frictionless experience, and decentralized applications can be built, operated, and used in just a short time.

Raiden Network

It is essentially a scaling layer that is developed to provide a seamless experience to the users through low-cost and faster transactions. It operates through the Ethereum blockchain and is also able to conduct a successful interaction with tokens that are exclusively built on ERC-20 standards.

Hash-locks and digital signatures are used to carry out token transfers. Raiden elevates security and helps in preserving the transaction’s integrity. Hence, it is quite identical to the Lightning network that is operated through bitcoin. Raiden, on the other hand, doesn’t require any sort of global consensus, and this is where it differs from the main chain in terms of operation.


When it comes to off-chain solutions, Trinity is yet another universal scaling solution that promotes seamless payments with minimal transaction fees. Furthermore, it provides convenient scalability and maintains a decent level of privacy in the process.

An additional benefit of being decentralized and autonomous, Trinity enhances the overall quality of the network in the ecosystem and adopts cutting-edge technology to ensure full data security. Everything that Trinity works on is completely open-sourced, which enables the developers to design their respective products under the same protocol.