These slides explore mechanics Bitcoin Lightning Network as Layer 2 scaling solution in detail . We have also discussed 0x protocol used as recipe for decentralized exchanges and Matic network as scaling solution for ethereum.
4. Problems with Bitcoin
Onchain Problem
● Long Transaction
confirmation time
● Microtransaction is not
practical . (High mining
fees)
● Bitcoin is not scalable.
Every nodes verify every tx
Stats
● Only 7 transaction per
second.
● 250 bytes/tx
● 1 MB blocksize
5. At 1,200 transactions per MB every 10 minutes and 7
billion people do two on-chain transactions per
month, blocksize would have to be 5.7gb.
6. Solutions ?
Some Giveaways
● Maintain databases
records
● Sidechains
● Payment channels
Reveal
● Database requires trust
● Sidechains will end up with
2 tx
● Payment channels require
frequent transaction.
8. Brief
Intro
● By creating a network of payment
channels, it is possible to find a path
across the network similar to
routing packets on the internet.
● The nodes along the path are not
trusted, as the payment is enforced
using a script which enforces the
atomicity (either the entire payment
succeeds or fails) via decrementing
time-locks.
Payment channels
● Payment channels are based
on the idea of transaction
replacement to update the
state of an unconfirmed
transaction before
broadcasting it to the network.
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11. Next steps
Assignment 1
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Assignment 2
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Assignment 3
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28. What if Carol refuses to share R?
What is Bob is not rich enough?
29. Hash Lock Time
Lock
HTLC are time bound conditional
payments that don’t require trusted
third parties. These programmable
escrows enable conditional p2p
value transfer and minimize
counterparty risk.
46. 1. An irresistible honeypot for hackers. Millions in funds continue to be stolen.
2. Expensive to maintain and cannot serve long-tail of assets.
3. Cannot integrate with decentralized applications. Liquidity is siloed.
Centralized Exchanges are Broken
47. What is 0x
exactly
1. Core settlement layer for trades.
Sign orders off-chain for free,
settle on-chain.
2. Free-to-use, open source, and
non-custodial. Tokens remain in
your wallet until trade is complete.
3. Relayers build exchanges on top
of protocol to serve new users.
Can easily share liquidity.
48. Using 0x Protocol.
1. Core settlement layer for trades.
Sign orders off-chain for free,
settle on-chain.
2. Free-to-use, open source, and
non-custodial. Tokens remain in
your wallet until trade is complete.
3. Relayers build exchanges on top
of protocol to serve new users.
Can easily share liquidity.
49. Ethereum
Scaling Solution
Matic Network is a Layer 2 scaling
solution that achieves scale by
utilizing sidechains for off-chain
computation, while ensuring asset
security using the Plasma
framework and a decentralized
network of Proof-of-Stake (PoS)
validators.
50. KEY FEATURES & HIGHLIGHTS
● Scalability: Fast, low-cost and secure
transactions on Matic sidechains with finality
achieved on mainchain and Ethereum as the
first compatible Layer 1 basechain
● High Throughput: Achieved up to 7,000 TPS on
a single sidechain on internal testnet; Multiple
chains to be added for horizontal scaling
● User Experience: Smooth UX and developer
abstraction from mainchain to Matic chain;
native mobile apps and SDK with
WalletConnect support
● Security: Matic chain operators are themselves
stakers in the PoS system
● Public Sidechains: Matic sidechains are public
in nature (vs. individual dApp chains),
permissionless and capable of supporting
multiple protocols