hello oh you're tired okay I'll try to
keep it short rather get for a
high-level overview about what we're
doing so you heard a lot about open
problems we have especially scalability
we've been talking about this today
already you might know that for example
visa just about 50000 standard
transactions peak per second and we
don't come closer
transaction penalty is some nice
property and many are worried about
transaction privacy so we thought about
could we solve these problems if he'd
changed the model if we rather have
transactions in private between the
participants who are involved in
transactions but do not put them on the
blockchain not to the public ledger but
rather use the blockchain just to
resolve disputes and to take things in
escrow so that's what rain Network tries
to inform it's enough chain asset
transfer network it's quite similar to
the Bitcoin lightning Network proposal
and this is work in progress so
the features shall be to be to internal
circuit should work with any token which
supports the standardized token API
which we tell it defined while ago it
should support instant asset transfers
so you should not wait for confirmations
for say five blocks but they should
really be instant support should support
micropayments this only works if the
transaction fees are way lower than the
values you want to transfer and it
should really scale out to basically I'm
at unlimited number of transfers per
second and we're looking for transaction
privacy so how does this work in order
to understand this you need to really
understand how a payment channel works
so I try to explain this in the payment
channel you would use that if one party
say Alice wants to pay Bob multiple
times and she doesn't want to see all
those transactions on the blockchain but
rather opens a payment channel on the
blockchain and payment channel would
know the address of the receiver that
would be Bob and address of the
initiator that would be Alice and also
it would take an escrow deposit from
Alice what Alice then can do is whenever
Bob sells something to her she can sign
an updated balance so the first balance
might be I signed one say Jeff coin for
Bob and later in the day she would sign
a second gift card to Bob now Bob can at
any time go to the blockchain and claim
to gift coins because Alice signed them
and well he would make sure that he will
not accept signed balances which are
higher than the deposit which is on
Shane
but otherwise he can always be sure if
he gets off shyness on transaction that
he will be able to claim this on change
to gender studies because that's
important yeah okay
so this is also simple pension we also
can have bi-directional para channels
it's a nice feature about bi-directional
pensioners is that safety f10 if both
parties deposit ten coins on chain they
could have updated balances which are
higher than ten for example if Ellis
sent nine coins to Bob but Bob sent five
coins to Alice then she could still send
another six coins to Bob so the balance
that she would signed would be sixteen
right so if you have transfer switch
gear in both directions you can for a
long lasting channel you can send things
back and forth and so again you can
settle this on chain any of the
partisans of Alice to Bob can post get
Unchained and settle this anytime the
requirement to settle being able to
settle this at any time is because one
of the parties could vanish they could
not respond anymore
so if we have pirates and shallots we
can change channels so say Alice wants
to pay Dave but does not yet have for
payment channel to Dave then she could
ask Bob and Charlie to help to transfer
payments to Dave so questions why
wouldn't she have her payment channel
stay at the first place that is you
remember we have to deposit something on
trains if you walk through water and
have to do multiple payments or many
payments every day then you don't want
to have a pension on this every receiver
of the payments so therefore she can ask
Bob and Charlie to cooperate they might
do so if you offer them a small fee and
how do we solve that Bob or Charlie do
not run away with the transfer which we
were signed by Alice but she'll actually
go to Dave we do that by using a
technique called hash log a hash luck is
when Ellis comes up with a random secret
which he does not yet share with the
other participants and the smart
contract on sharing will only settle the
transfer if one also provides the secret
for the hash log the hash lock is the
hash of the secret so you can publish
the hash lock but you will not be able
to compute the secret so now Ellis would
sign the transfer to Bob which is hash
locked and Bob to Charlie which is hash
locked those would deduce a small fee
and finally Dave might get a signed
signature by Charlie which is still hash
locked so none of them can claim
anything unchanged from these transfers
but then Dave could tell Alice hey I
received a signal signed talents update
from Dave which is hash lock would you
tell me the secret so I can show you the
webpage of whatever Alice wants to buy
from Dave and Alice will eventually
reveal the secret and now Dave can claim
those pants on Shane by providing the
signed balance update from Charlie and
which is hash lock but he would know the
secret so does the
there's my contract would hash Disick
the liquid and put check if that's the
same as the hash lock and then Dave can
claim on the updated balance transfer
and same because then it's on chain same
so Charlie and Bob at latest at this
time would learn also the secret and all
secured claim adapted it balances so
there's no trust involved so far right
and all those transactions have been off
chain and they probably will stay off
chain except if one of these parties
becomes unresponsive so if we have
change channels we can think about a
network of channels if you have a
contract which lists all the payment
channels then we can derive the network
graph from all the payment channels so
we can basically find for any two
participants a route through the network
that would allow us to transfer our
values through the network and as we
learned those transfers cancel out on
average or okay yeah and unchanged that
limit is infrequent because there's no
need to settle except if someone
uncooperative and break self does not
provide the secret and so those
transactions which are offed off chain
they are cheaper they're instant because
you don't have to wait wait for any
confirmations and we still have no
counterparty risk so this really works
and there's maybe something important to
notice there might be highly connected
hubs if that's implemented because
highly connected apps they offer the
advantage that you have shorter routes
between two participants and there's a
motivation to run these subs because you
can earn transaction fees
so in this decentralized network there
might be some points of centralization
but which are not necessary and they
will have a lot of competition now if we
have this in place then something we get
basically for free is decentralized
exchange
how that works is precondition is that
you have two different assets and
pensions for two different assets and
then you could for example broadcast an
exchange in chance say I want to i offer
ten of asset a and want to exchange this
for three of SP and then somehow this
would be broadcasted to those interested
in this kind of exchange and the
initially I initiator might get some
offers two exchanges and would
acknowledge the other party that one of
those parties that Chris and then what
you would do is we would have two
transfers one of us at a safe from Alice
three to eight today and one from Dave
to Alice for SSB and they would use the
same hash lock and if they used the same
hash lock then either none of or both of
those transfers execute so there's still
no risk there's no central party and you
can be sure that this option as a
transfer of chain asset exchange just
works okay
okay and then we're talking about
etherium so there's a bonus we can lock
these transfers to unchain conditions
this is similar like an acid exchange
but we would lock one of those transfers
the second one also to condition on the
chain and well we would not write the
complete condition but just provide a
hash of it and you can see let's say
let's look at examples say off chain
betting would say Alice could say I
transfer of the same asset now let's say
that's u.s. dollar coins Alice would
give ten coins to Bob to Dave if Dave
transfers a hundred coins to Ellis in
the case that you're certain condition
on chain is true for example that an
Oracle confirmed that Lauren's blessing
one in the next elections or something
similar is of chain option through kind
of options Alice would give ten today if
Dave gives 100 to Alice if a certain
condition on ten is true in this case
it's the price of for example US dollar
to e theorem to ether would be ten at a
certain block and this can be
generalized but you basically lock
something with code and data so you can
create pretty complex of chain
agreements which could be settled on
chain they don't have to usually date
will not be set launching because every
participant will can evaluate for
themselves what would happen if she's at
Lamont chain
okay so if you compare this to the
Lightning Network um I think the the
implementation is easier because in a
theorem we have accounts and we have DBM
there's an issue if someone does not
provide the secret for hash lock then a
channel becomes stale this is something
which I might explain later something we
can mitigate also very good and then we
can if you think about the deposit on
the pair mention of like a prepaid
account if we can add more funds to that
channel if you want to and then of
course it works just any token and we
have this smart contract
interoperability so all we get from this
is instant as a transfers really they'll
cross transaction costs we can't scale
out transaction capacity or at least
asset transfer capacity we have
transaction privacy because you remember
just machine transactions are only known
to those involved that might be two or
more parties the hops along the plants
the transfer we get truly decentralized
after the change for free
we have no central auto book we have no
mentioning engine and we can have pretty
complex option agreements so status of
your project
the current version of aetherium brings
everything we need to implement this so
there are no protocol updates needed
this is currently working progress in
our company we have shown that we can
have 500 transfers on a standard
notebook per second and so you can
imagine you can scale this out to two
more transfers if you add more notes
well help us welcome in the project and
the code is available on github
what's fastest right
if you like your 5 minutes for questions
it's okay it has it questions okay
you're regarding the anonymity part yeah
so transactions in a payment channels
would not be public but wouldn't the
actual payment channel be on chain they
will be public but they not necessarily
correspond to whom you're actually
transacting with on off chain so they
would go by a sum payment sir so they
would if you do direct person-to-person
payments on of them be visible but if
you go through some payments hub yeah
so have you thought about general
transaction obtaining contract States as
si si version like you can have a
payment channel that is the you know
you're playing a game or something and
it's all off chain until one person
leaves and then the other person can can
basically submit the dream of the state
the state of the game to the chain have
you thought anything about those things
yeah what you might need to do here is
that you need to replay all the
transition steps you have on chain which
is a lot of data on which will be very
expensive on seeing what we have here's
more we only have updated balances so
you would not settle the whole
transaction history but only the last
updated balance which is probably
cheaper so if the game is decided this
decides in a way that you only need the
last state invalidate that then that
would be possible - can you elaborate on
how it's possible that payment channel
does not get stale if secret is not
published yep
short answer mirco trees instead of
having the hash lock in the updated
balance we have a merkel route which is
like a fingerprint of all pending
transfers so you can have interval from
asset transfers
all right thank you