Layer-2 scaling technique where participants open a channel, conduct many off-chain transactions between themselves, then settle the final state on-chain. Reduces fees and latency for repeated interactions between the same parties. Lightning Network (Bitcoin) is the most prominent example. Less common on Solana due to its already-low fees.
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Layer-2 scaling technique where participants open a channel, conduct many off-chain transactions between themselves, then settle the final state on-chain. Reduces fees and latency for repeated interactions between the same parties. Lightning Network (Bitcoin) is the most prominent example. Less common on Solana due to its already-low fees.
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State Channel (state-channel) Category: Blockchain General Definition: Layer-2 scaling technique where participants open a channel, conduct many off-chain transactions between themselves, then settle the final state on-chain. Reduces fees and latency for repeated interactions between the same parties. Lightning Network (Bitcoin) is the most prominent example. Less common on Solana due to its already-low fees. Related: Layer 2 (L2), Lightning Network, Scalability
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A scaling solution built on top of a Layer 1 blockchain that processes transactions off-chain while inheriting the security of the base layer. L2 types include optimistic rollups (Arbitrum, Optimism), ZK rollups (zkSync, StarkNet), state channels, and sidechains. L2s post transaction data or proofs back to L1 for finality.
A Layer 2 payment channel network built on Bitcoin that enables near-instant, low-cost transactions by conducting most activity off-chain. Two parties open a channel by locking BTC in a multisig transaction, then exchange signed commitment transactions off-chain; only the opening and closing transactions are broadcast on-chain. Payments can be routed across multiple channels using Hash Time-Locked Contracts (HTLCs), enabling trustless multi-hop transfers.
A blockchain's ability to handle increasing transaction volume without degrading performance or decentralization. The scalability trilemma posits that blockchains can optimize at most two of: decentralization, security, and scalability. Solutions include Layer 2 rollups, sharding, parallel execution (Solana's Sealevel), and modular architectures.
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Self-executing code deployed on a blockchain that automatically enforces the terms of an agreement when conditions are met. Smart contracts are immutable once deployed (unless upgradeable), transparent, and trustless. On Solana they're called 'programs'; on Ethereum they're written in Solidity and run on the EVM. They enable DeFi, NFTs, DAOs, and other decentralized applications.
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A scaling solution built on top of a Layer 1 blockchain that processes transactions off-chain while inheriting the security of the base layer. L2 types include optimistic rollups (Arbitrum, Optimism), ZK rollups (zkSync, StarkNet), state channels, and sidechains. L2s post transaction data or proofs back to L1 for finality.
A Layer 2 payment channel network built on Bitcoin that enables near-instant, low-cost transactions by conducting most activity off-chain. Two parties open a channel by locking BTC in a multisig transaction, then exchange signed commitment transactions off-chain; only the opening and closing transactions are broadcast on-chain. Payments can be routed across multiple channels using Hash Time-Locked Contracts (HTLCs), enabling trustless multi-hop transfers.
A blockchain's ability to handle increasing transaction volume without degrading performance or decentralization. The scalability trilemma posits that blockchains can optimize at most two of: decentralization, security, and scalability. Solutions include Layer 2 rollups, sharding, parallel execution (Solana's Sealevel), and modular architectures.
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A distributed, append-only ledger that records transactions in cryptographically linked blocks. Each block contains a hash of the previous block, forming an immutable chain. Nodes in the network maintain copies of the ledger and reach agreement through consensus mechanisms. Blockchains enable trustless, decentralized record-keeping without a central authority.
The protocol by which nodes in a distributed network agree on the current state of the ledger. Common mechanisms include Proof of Work (Bitcoin), Proof of Stake (Ethereum, Solana), and BFT variants. Consensus ensures all honest nodes converge on the same transaction history despite potential network delays or malicious actors.
A consensus mechanism where validators are selected to produce blocks based on the amount of cryptocurrency they have staked (locked) as collateral. PoS is energy-efficient compared to Proof of Work. Misbehaving validators risk losing their stake (slashing). Solana, Ethereum (post-Merge), Cosmos, and Cardano use PoS variants.
A consensus mechanism where miners compete to solve computationally expensive puzzles to produce blocks and earn rewards. PoW provides strong security (51% attack resistance) but is energy-intensive. Bitcoin and pre-Merge Ethereum use PoW. The difficulty adjusts to maintain target block times regardless of total network hash power.