As long as participants in the network need to see all transactions in order to validate the ledger state, scale, in the form of TPS, is limited to [minimal required bandwidth]/[size of average transaction]. This means that, (without introducing trust or uncertainty of consensus), scaling requires a method by which value tokens can change ownership in private, while the ledger state can still be validated with only publicly available information.
Since such private token movements are external to the public layer, and since this model still contains only a single layer, they must, then, belong to The Second Layer.
One such implementation of a second layer is the Lightning Network, built upon the Bitcoin network first public layer. This text examines the similarities and differences of an analogous second layer, built upon the tangle.
Requirements
A Lightning-like solution would require:
- MultiSig addresses - to enable partial signage between two private trustlessly cooperating actors.
- Basic “smart contract” functionality, to enable conditional transactions.
- Some sort of timestamping - to enable transaction conditions to be time-based.
Req 1 and 2, while not easy, are theoretically possible, and therefore “only” require definitions and implementations.
Req 3, which is filled in Bitcoin by the time-ordered sequence of blocks, require a different solution for a tangle. See open questions.
Solutions
The fulfilment of these requirements can enable a lightning-like second layer.
However, maybe a much stronger solution can be created by allowing the group of private actors to include more than two participants, but a small enough number to still enable a complete communication graph. Imagine that within that group, the movement of funds would be done on an abstract tangle-like structure, which would, due to the nature of full communication and partial signage, not require consensus. Such a solution would ideally enable using much of the existing mechanics, and would enable easy scaling within small-enough economic groups. (which could overlap to enable greater scaling, as in lightning).
This is a vague idea, which might be worth exploring.
Open questions:
- [Better understanding of lightning mechanics are required here].
- How can timestamping be properly done? (This enables lightning-like channels)
- How would a private sub-tangle analog of lightning could work?