GlossaryAdvanced
State Channel
An off-chain channel letting participants exchange many updates before settling a final state on-chain.
A state channel lets two or more participants exchange many updates directly between themselves off-chain, only recording an opening and closing transaction on the base blockchain, similar in concept to how a Lightning Network payment channel works for payments specifically.
This can enable fast, low-cost interactions for participants already known to each other, though it's less suited to interactions involving arbitrary, previously unknown parties.
Examples
- The Lightning Network's payment channels are a specific, payments-focused application of the state channel concept.
- A state channel requires only an opening and closing transaction on the base chain, not every individual update.