In the realm of blockchain scalability, there's no single path; various alternatives exist. A new trail emerges with the introduction of the Phonon Network , offering an initial focus on Bitcoin and Ethereum before expanding to other blockchain technologies.
Unveiled by GridPlus co-founder Karl Kreder this week, this novel second-layer scaling framework has been crafted by the GridPlus team, who are acclaimed for their Lattice1 digital security device, to be a hardware-based off-chain payment scheme.
Cryptocurrency enthusiasts may draw parallels with the Lightning Network for Bitcoin and the Raiden Network for Ethereum, both off-chain payment solutions. What sets the GridPlus innovation apart is that the payments, or 'phonons', can occur directly between individuals without needing intermediaries or routing hubs.
Smart Cards Are the Key
Initially rolled out for the two leading public blockchains, the system is designed to be blockchain neutral. It can adapt to both account-centric blockchains like Ethereum and UTXO-centric ones like Bitcoin.
Operationally, users can transfer assets such as bitcoin, ether, and tokens off-chain, facilitated by a distinctive off-chain protocol alongside smart cards.
These smart cards align with the governing consensus rules of compatible blockchains and are fortified by physically unclonable function (PUF) technology, similar to the security in credit cards. This ensures a card's identity remains authentic and unaltered, backed by an ECDSA signature from the card producer.
With this technical framework, the Phonon Network fights off double-spending attempts, as manipulating the cards becomes practically impossible. Although this system is adaptable to smart card technology in general, it finds immediate compatibility with GridPlus's proprietary SafeCards.
Phonons function as discrete data bundles paired with specific assets like a bitcoin or a single ether, mapped to a deposit address on the respective blockchain. When a phonon transaction occurs, two smart cards exchange a phonon's private key through a secure channel.
Following this, the smart cards confirm each other's authenticity using certificates, after which transaction specifics are conveyed to the recipient. The recipient’s card checks the blockchain to ensure the asset's presence.
Upon verification, the recipient’s card approves the transaction, and the phonon is handed over, after which the sender’s card erases its existence. Now in charge of the phonon, the recipient is free to deposit it back on-chain.
Overall, this second-layer network offers a distinct approach among existing scaling technologies. Kreder highlighted in his announcement post.
“Every scaling solution has its unique strengths and weaknesses. Phonon Network stands out as it circumvents the need for capital lock-up, intermediaries, or continuous blockchain monitoring by participants.”
Emerging Layer-2 Blockchain Innovations Galore
The Lightning Network has seen some intriguing developments recently.
The latest LND software update now allows users to operate their own watchtowers — a long-sought feature aimed at safeguarding Lightning channels from threats or unintended fund losses around the clock. Moreover, last week's revelations indicated that a “Spectrum” protocol method for facilitating the creation of colored coin tokens on Lightning is in progress.
Beyond LN, also proposed this month was Utreexo , a new Bitcoin scaling strategy designed to simplify and lower the cost of full node operation. Furthermore, the team behind goTenna has introduced Lot49 , an innovative protocol for a decentralized communication layer fueled by bitcoin micropayments.
