Article • over 5 years ago
Orchid Network: Introducing Nanopayments for a Bandwidth Marketplace
Summary
- Orchid's layer 2 scaling architecture for Ethereum incorporates probabilistic nanopayments for service payments in its bandwidth marketplace.
- Nanopayments are tiny, on/off payments that transmit value as they move.
- The bandwidth marketplace consists of buyers (Orchid App users) and sellers (Orchid Server operators) who engage in per-packet network payments.
- Networked payment channels, such as the Lightning Network and Raiden Network, are less practical for Orchid's use case as they have disadvantages like counterparty risk, higher cost, routing failures, and more parties involved in payment information.
- Orchid's nanopayments system enables users to issue valid nanopayments to providers and providers to redeem winning nanopayment tickets as on-chain transactions.
- Orchid nanopayments have advantages over existing payment channel solutions, including lower fees, scalability without Ethereum upgrades, and the ability for users to switch between providers easily.
- Orchid nanopayments have some limitations in terms of variance, but this can be mitigated by depositing a multiple of the face value.
- Ethereum transactions on Orchid cannot be censored easily due to the decentralized nature of mining communities and lack of regulatory limitations on mining strategies.
- Orchid nanopayments are designed to provide continuous service to users and support millions of users without requiring upgrades to Ethereum.
- The Orchid Network provides a modern-day VPN application with improved payment options and user flexibility.
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