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judymcconville@roadrunner.com 2017-05-02 13:14:56 -07:00
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@ -245,7 +245,7 @@ image::images/mbc2_1204.png["A payment channel between Bob and Alice, showing th
==== Simple Payment Channel Example
((("payment (state) channels", "example of")))To explain state channels, we have to start with a very simple example. We demonstrate a one-way channel, meaning that value is flowing in one direction only. We will also start with the naive assumption that no one is trying to cheat, to keep things simple. Once we have the basic channel idea explained, we will then look at what it takes to make it trustless so that neither party _can_ cheat, even if they are trying to.
((("payment (state) channels", "example of", id="PSCexample12")))To explain state channels, we have to start with a very simple example. We demonstrate a one-way channel, meaning that value is flowing in one direction only. We will also start with the naive assumption that no one is trying to cheat, to keep things simple. Once we have the basic channel idea explained, we will then look at what it takes to make it trustless so that neither party _can_ cheat, even if they are trying to.
For this example we will assume two participants: Emma and Fabian. Fabian offers a video streaming service that is billed by the second, using a micro-payment channel. Fabian charges 0.01 millibit (0.00001 BTC) per second of video, equivalent to 36 millibits (0.036 BTC) per hour of video. Emma is a user who purchases this streaming video service from Fabian. <<emma_fabian_streaming_video>> shows Emma buying video streaming service from Fabian, using a payment channel:
@ -275,7 +275,7 @@ Finally, Emma clicks "Stop" to stop streaming video. Either Fabian or Emma can n
.Emma's payment channel with Fabian, showing the commitment transactions that update the balance of the channel.
image::images/mbc2_1206.png["Emma's payment channel with Fabian, showing the commitment transactions that update the balance of the channel"]
In the end, only two transactions are recorded on the blockchain: the funding transaction that established the channel and a settlement transaction that allocated the final balance correctly between the two participants.
In the end, only two transactions are recorded on the blockchain: the funding transaction that established the channel and a settlement transaction that allocated the final balance correctly between the two participants.((("", startref="PSCexample12")))
==== Making Trustless Channels