prospect
Blockchains are very powerful, but they are quite slow.
Imagine you are paying for an item. After you swipe your card, you need to wait 10 seconds for the cashier to receive the payment confirmation before you can leave. This rough 9 seconds is too long.
Now imagine that you are a processing program running on a computer. You want to sell content, data, bandwidth, processor time, memory or access to infrastructure. Imagine you need 10 seconds to get confirmation of payment from another processing program. It is orders of magnitude worse than your standard. This is crazy. What you are selling may be out of date by the time you receive the payment confirmation.
The upcoming machine-to-machine (M2M) economy of software and software autonomous trading is an important part of future global commerce. But the requirements of the machine are very high. They want fast transmission at almost zero cost. Therefore, fast and low-cost (micro)payments will become an important part of the M2M economy.
Blockchain will become a popular payment infrastructure for IoT and M2M economy. Combined with a stable currency, this technology will also become a viable candidate technology for daily payments by humans and machines.
But in order to be feasible, blockchain-based payment systems must be fast, cheap, and scalable. These characteristics are exactly what the current blockchain is not good at.
There are many scalability methods such as fragmentation, side connection, interactive authentication protocol or state channel. While these methods can potentially expand the overall transaction capacity, only payment channel networks such as Raiden Networks can simultaneously expand the low-cost and low-latency features.