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What is CounterFactual? Read our latest tech point article on Medium to find out!

When people see something happening in real life, they tend to create possible alternatives that are contrary to what actually occurred. This tendency is named “Counterfactual thinking” by Daniel Kahneman, a Nobel laureate in Economics. You might wonder what CounterFactual has to do with blockchain?

In this article, the author would like to share some of his thoughts on blockchain CounterFactual and what it can do for us.

What is CounterFactual?

CounterFactual (CF) thinking is, as it states: “counter to the facts”. These thoughts consist of the “What if?” and the “If I had only…” that occur when thinking of how things could have turned out differently. CounterFactual thoughts include things that–in the present–now could never happen in reality because they solely pertain to events that have occurred in the past.

From the perspective of blockchain, CounterFactual means: the transaction result could be obtained on-chain, but in reality, the execution result is not obtained on-chain.

In the off-chain scaling technology of blockchain, CF refers to CounterFactual Instantiation, which is derived from a state channel-based off-chain scaling technology proposed by L4Lab. It is widely studied and promoted as a type of blockchain scaling design in the field of blockchain research.

CounterFactual Instantiation means that smart contracts can be deployed on the off-chain CF state channel, instead of being counterfactually instantiated on the blockchain. As long as all participants of smart contracts follow the methods defined in the CF state channel protocol, the execution results of the operations in the state channel are fully equivalent to those executed on the blockchain.

Simply put, off-chain CF state channels can achieve the same results as the blockchain, which include not only the state data of smart contracts but also the trustless feature of the blockchain (traceability and irreversibility at its core). Since the results ...

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