- No need for an additional token.
- Users can “remain” on their blockchain.
- No need to trust a centralized third party.
Basic Building Blocks
- Multisignature feature (Multisig);
- Hashing functionality; and
- Time-lock functionality
1. Multisig is an old and well-trusted concept that can be compared to a shared checkbook with multiple required signatories.
2. Hash functions are standard cryptographic concepts. These are one-way functions to convert arbitrary data (in our case a secret “s”) into a unique hash “h.” This hash hcan then be shared safely without anyone being able to compute the secret s used to create it.
3. Time-lock is a simple requirement for funds to be locked up until a future date. Blockchains are found to have two different time-locks: relative and absolute.
Putting It Together
The Full Route
Conclusion
- Cryptographically-secure (relies on cryptographic standards),
- Off-chain (like the Lightning- or Raiden-Network) ,
- Multi-Asset (cross-chain),
- Instant (no need for a transaction to settle on the blockchain as updates only happen between the parties until it gets broadcasted)
- A Transaction Network, such as COMIT.