A simple use case for state channels is video streaming. A user who would like to stream content can open a state channel with a content provider. The user who would like to stream content allocates a certain balance at the opening of the channel. Once they start streaming a certain amount of tokens is subtracted from their state channel account balance at a regular time interval (e.g. every 30 seconds). When the state channel is closed its last state (which includes the final account balances) is written onto the blockchain. All transactions within the state channel are executed almost instantly (via automated transaction signing) and transaction fees are incurred only when data is written onto the blockchain (in the example above this takes place only at the beginning and closing of the state channel).
We will be discussing the various use cases that state channels can enable in more detail in future posts. Meanwhile, to learn more about state channels, please refer to our Protocol repository in GitHub.Alexander Kahl Joins the æternity Dev Tools Team