Will Bitcoin become faster and more convenient? An explanation of the future technology "State Chain" for beginners!
Hello, I'm John, your blockchain guide!
Have you heard of Bitcoin? It's the "digital money" that we often see in the news these days. However, some people may be thinking, "It seems convenient, but it seems kind of difficult..." or "I've heard that it takes a long time to send money and the fees are high..."
Many new technologies are being developed to solve these problems with Bitcoin. Among them,"Layer 2 technology (technology that helps with processing outside the basic mechanisms of Bitcoin)"one of"State Chain"I will explain this in an easy-to-understand manner even for first-time users!
What exactly is a state chain?
In a nutshell, the state chain is a system that transfers ownership of Bitcoin to the network of the Bitcoin itself (this isBlock chainIt is a mechanism for making communication easier outside of social networks (known as "social networks").
Is that a bit difficult? To give an example,"Instead of directly handing over the gold bar (Bitcoin) itself, we exchange a 'proof of ownership' of the gold bar."It's like this. If you exchange certificates, you can change hands more quickly and at lower cost without having to carry heavy gold bars. State chains are a technology that uses a similar concept to make Bitcoin transfers more efficient.
This "proof of ownership" exchange takes place outside the main Bitcoin network (blockchain).Off-ChainThis is done via a single network (called a "network"), so it is less affected by congestion on the main network.
How do you transfer ownership of Bitcoin?
This is roughly how a state chain works:
- Step 1: Deposit Bitcoin into the State Chain
First, person A deposits the Bitcoin they own (for example, 1 BTC) into a special mechanism called a state chain. This is a transaction that is carried out only once on the main Bitcoin network. This Bitcoin is stored securely so that it cannot be moved without a special "key." This key is kept between person A and"State Chain Entities (SEs)" are organizations or programs that help operate the state chain.It will not be available unless the person in question cooperates. - Step 2: Transfer ownership to Person B
If person A wants to give this 1 BTC to person B, instead of moving the Bitcoin itself, he/she gives information (such as part of the private key) that represents the "ownership" of this 1 BTC to person B. Then, he/she notifies the state chain entity (SE) that "the owner of this Bitcoin is now person B" and has the record updated. - Step 3: Person B withdraws Bitcoin (if necessary)
As the new owner, Person B can at any time work with the State Chain Entity (SE) to withdraw the deposited Bitcoin to his or her own Bitcoin address, which also becomes a transaction on the main Bitcoin network.
The key points here are:State Chain Entities (SEs) cannot arbitrarily steal deposited Bitcoins.That is. SEs only serve to mediate transactions and help update records, and the ultimate control of Bitcoin remains with the owner. Even if the SE becomes uncooperative, there are safety measures in place that allow the owner to withdraw Bitcoin independently after a certain period of time has passed.
The great thing about state chains!
State chains have the following advantages:
- Transfers are fast!
Since ownership can be transferred without going through the main Bitcoin network (blockchain), the time it takes for a transaction to be approved is significantly reduced. This is convenient when you want to deliver something to the other party immediately. - Low fees!
Transactions on the main network can have high fees depending on congestion, but off-chain transactions using state chains can have much lower fees. - Improved privacy!
The transaction records of who has transferred bitcoin from one person to another are not recorded on the main blockchain, which is thought to provide greater privacy.
Important points to know
Of course, as this is new technology there are some things you should be aware of.
- The existence of a State Chain Entity (SE)
Although SEs cannot steal funds, if they stop service or intentionally refuse to cooperate, Bitcoin transfers may temporarily become unsmooth (you will eventually get them back, but it may take time). Therefore, it is important to choose a trustworthy SE. - The amount of Bitcoin deposited is fixed
Once an amount of Bitcoin is deposited in a state chain (for example, 1 BTC), it will be transferred in that amount. It is difficult to divide it or combine it with other Bitcoins in the process under the current state chain mechanism.
Who thought of that?
The idea of this state chain isRuben SomsenIt was first invented by someone who said,CommerceBlockCompanies such as this one are currently developing this idea so that it can be put to practical use.
According to the original article, this is the second in a series on Bitcoin Layer 2 technologies and focuses on state chains. It was written by Shinobi.
Summary: State chains may expand Bitcoin's future!
Today, I talked about Bitcoin's new technology, "State Chain." It may have been a little difficult, but I hope you found it to be one of the ways to make Bitcoin easier to use.
State Chain is Bitcoin'sUTXO (Unspent Transaction Output) is a block of Bitcoin that has not yet been spent.It is a technology that allows ownership of Bitcoin to be transferred quickly and cheaply off-chain, i.e. outside the main Bitcoin network. This has the potential to improve the usability of Bitcoin.
A word from John:
In the world of Bitcoin, new technologies are constantly being developed, which is really exciting! I think that Layer 2 technologies like state chains are an important step in making Bitcoin more widely used and accessible to more people. Of course, every technology has its advantages and disadvantages, so it's important to fully understand them before using them. I'd like to keep an eye on their future evolution!
This article is based on the following original articles and is summarized from the author's perspective:
Bitcoin Layer 2: Statechains