Home / Ripple / Co-founder Stellar (XLM) and Ripple (XRP) Jed McCaleb explains why they work on Starlight payment channels

Co-founder Stellar (XLM) and Ripple (XRP) Jed McCaleb explains why they work on Starlight payment channels

A couple of days ago, the Stellar community on Reddit and elsewhere was informed of a new project launched on the Stellar – Starlight network. The simple explanation of Interstellar is that it is the Stellar version of Lightning Network.

The channels are two-way private routes for two parties that pay the other in a private and free way, without involving the Stellar network before the final liquidation of the blockchain itself.

Payment channels allow parties to make transactions in private, instantly and securely, without paying fees. They are also a first step towards the construction and connection to payment channel networks such as Lightning and Interledger.

McCaleb stated on Reddit:

I've seen some people ask why we're building a flash like the state channel protocol for Stellar. Interstellar has just released an impressive first draft implementation here: https://github.com/interstellar/starlight

There are 3 main reasons we are working on:

1) private life. Imagine that most of Stellar's use will be between financial institutions. Almost everyone will have privacy problems if every transaction is transmitted to the public network. Starlight delivers them via a trustworthy transaction, keeping transactions out of the public chain.

2) Scalability. Although Stellar fits really well compared to many other blockchain solutions, there are indeed many payments made in the world and it does not seem feasible or even desirable to make them all happen on the register. Stralight will allow the use of Stellar to scale much more than keeping everything on the register.

3) Interoperability. We do not think that the world will end up with just one blockchain or a distributed ledger. Interoperability between them will become increasingly important. Starlight puts us on the road to implement it.

The Starlight roadmap is extensive as it plans to add channels for non-native resources (coins that are not based on stellar blockchain) along with cross-channel and cross-currency atomic payments. One of the main objectives, as stated by McCaleb, is the interoperability with other level 2 solutions from other blockchains such as Interlingger and Lightning.

One of the things that did not pay too much attention is the fact that once the channels are operational and have a certain capacity, each payment channel will block a certain amount of funds by decreasing the offer of XLM which will probably be followed by a price increase!

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