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State channel

A system where participants exchange authorized state updates offchain and use a blockchain to enforce settlement.

PLAIN-ENGLISH DEFINITION

In more detail

Participants agree to successive updates without recording every one onchain. The blockchain provides the setup and enforcement process when they settle or dispute the state. This reduces repeated onchain activity, but the channel still needs clear rules for challenges, monitoring and what happens if one participant stops cooperating.

IN THE WILD

How you might use it

You and another player exchange signed game-state updates, then use the channel's blockchain settlement rules for the final enforceable result.

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By Crypto Dictionary · Published · Updated

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