Sprites and State Channels: Payment Networks that Go Faster than Lightning

Understand

Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot scale for wide-spread use.

• A leading approach for cryptocurrency scaling is a smart contract mechanism called a payment channel which enables two mutually distrustful parties to transact efficiently (and only requires a single transaction in the blockchain to set-up).
• Payment channels can be linked together to form a payment network, such that payments between any two parties can (usually) be routed through the network along a path that connects them.
• Crucially, both parties can transact without trusting hops along the route.