One of the major issues plaguing blockchain technology is scalability. As the number of users balloons and more transactions are added to the distributed ledger, block sizes eventually become a hindrance to growth as it takes longer and longer to process and confirm the transaction.
This issue leads to Bitcoin blockchain splintering on August 1st. If cryptocurrencies are going to pose a significant challenge to traditional centralised payment systems (Visa processes up to 56,000 transactions per second), they will need to find a way to leap the block size hurdle. Even platforms like Ethereum, with unlimited block size, cannot escape this contentious issue.
The Raiden Network promises a solution to Ethereum’s scalability conundrum. Named after a Mortal Kombat character, the Raiden Network, instead of processing all transactions on the Ethereum blockchain, Raiden performs as a second layer network (think Bitcoin’s Lightning Network) enabling the private exchange of messages to sign transactions. Transactions are pushed through at a fraction of a second. This protocol is an extension to Ethereum. Raiden complements the existing ecosystem and makes it far more efficient.
The Raiden protocol can handle over 1 million transactions per second without even breaking a sweat, a breakthrough that positions it as a significant threat to existing financial payment networks. Raiden network is also designed to facilitate low transaction fees, allowing for the transfer of even lower values. Thich by extension makes a worldwide decentralised economy that much more possible.
Raiden technology, in addition to facilitating crypto-based micro payments, could potentially aid in the creation of, new kinds of token systems, decentralised markets, and exchanges (doing away with third party exchanges as we know them today)
The official release for Raiden was set for March of this year then pushed back to April, no sign of it yet, however. Developers assure us that it is on its way and was more than 60% complete and we should be hearing of an Ethereum soft fork to implement the protocol soon. For now, we wait in anticipation.