Liquidity Network is a project worth keeping an eye on. Blockchain has the potential to change how people conduct financial transactions completely. However, when it comes to the practical side of using Bitcoin or Ethereum on the scale that would allow cryptos to challenge payment processors like Visa, there are a few issues.
Network congestion is already a problem sometimes, and despite innovative efforts by developers, if blockchain is going to remove existing financial intermediaries from the equation, there may need to be new approaches to network architecture.
One project that is creating a potential solution is called Liquidity Network. They have a novel idea to eliminate network congestion and slash the cost of transactions. Unlike a payment system that uses a Blockchain directly, Liquidity Network goes off the chain and drastically reduces settlement time and expenses.
While Liquidity Network is still in its early stages, the platform they are developing has some unique advantages that could mature into an amazing technology.
Liquidity Network uses a series of off-chain hubs to remove the need for block-based verification, which is one of the biggest hindrances to scaling blockchain up to the level the current global economy needs.
Arthur Gervais, Ph.D., and founding member of Liquidity Network thinks this system offers distinct benefits over existing payment services like Lightning, due to its unique structure.
Instead of building a new blockchain to create a more efficient system, the network will use blockchain to ensure that user’s funds are safe, but when it comes time to transfer funds between users on the network, the novel architecture will come into play.
Users will fund their account via an Ethereum-based smart contract that allows them to clear transactions with others on the network. Unlike Raiden or Lightning, Liquidity Network transactions require no on-chain changes to be made. Users funds can be removed to the chain at any time, without cost.
There is, of course, the question of how this system would pay for itself. Dr. Gervais explains that while using the network would be free to small accounts, but larger users would have to pay for premium access to the system or other extras like guaranteed uptime.
Overall, this seems to an incredible idea, which has been able to progress to a substantial degree without much public financial support. They are now in the process of selling tokens to continue developing their platform and refining the security that would keep users safe as their network gains in popularity.
Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology.