Collaboration between LASS and research group at NCKU enables real-time air pollution monitoring with $IOTA distributed ledger technology for all the PM2.5 stations in Taiwan.
The goal of the IOTA Foundation is it to build a flourishing Machine Economy, where machines seamlessly interact and transact with each other. With IOTA, we have introduced the first scalable distributed ledger architecture that has no transaction fees and is able to run in the Internet of Things environment. The power of IOTA is in its network, as it scales horizontally with the number of network participants transacting with each other.
Over the recent years, Layer-2 solutions (such as Bitcoin’s Lightning Network, and Ethereum’s Raiden) became a popular solution to enable fast transactions with lower transaction fees for conventional Blockchains. During the last months, the IOTA Team (most prominently Paul Handy, Lewis Freiberg and Chris Dukakis) have been working diligently to develop a similar approach in IOTA as an ad-hoc solution: Flash channels.
Flash is a bi-directional off-Tangle payment channel to enable instantaneous, high-throughput transactions. In essence, they provide a way for parties to transact at high frequency without waiting for each transaction to confirm on the public IOTA network. Instead, only two transactions will ever occur on the main IOTA network: opening and closing transactions of the Flash channel. An off-Tangle approach reduces the per-transaction overhead to a negligible level by creating signed transactions off the tangle and opens up a feeless transaction model for instant, token streaming.
When a channel is created each party deposits an equal amount of IOTA into a multi-signature address controlled by all parties. Once the initial deposits are confirmed the channel does not need to interact with the network until it is closed.
Once the parties have finished transacting, the final balances are published to the network. This approach can reduce thousands of transactions down to just two transactions.
Flash channels rely on an equal incentive for parties to participate in the channel in good faith. Incentives are required, like with any multi-signature scenario, as a signing party may refuse to continue signing transactions.
Flash combats this by reducing the total amount of transactable tokens within the channel as they are used. This reduces the incentive for a party to attach a previous transaction bundle as they will never achieve a better outcome than the channel’s most recent state.
To illustrate, assume that two parties enter a channel with 50 tokens each — the pool would control 100 tokens, but only 50 tokens will ever be transacted in the channel. When one user wants to send 5 tokens to the other, they also release 5 tokens to them, such that each party would consider that they still have a controlling interest of 45 tokens. Another way of looking at it, is that if one user proposes to send 10 tokens to the other, the other would consider that as a payment of 5 tokens. As future transactions are signed, the amount in each of these chosen output addresses shall only go up, whereas the amount sent to the remainder address shall only go down.
The remainder is also used as collateral to stop a premature exit from the channel. If a party refuses to close the channel, the latest signed bundle can be attached to the tangle which will deposit the remainder into a multi-sig address. When the parties have agreed on a reasonable outcome they can access the address and distribute funds — both sides have a stake in coming to a resolution, as a stalemate will result in lost funds.
LASS IOTA message RESTful API Guide