Scaling solution Moonbeam is developing by the Bitcoin exchange and wallet provider. Moonbeam is a platform which does not need any SegWit’s transactions.
This platform will provide the proper way to different platforms. Bitcoin exchanges, its hosted wallets, and payment procedures will be available on one platform. This is basically one-way payment channel with each other.
How does it work:
By taking the transaction’s off-chain, Moonbeam has the ability to reduce the transaction’s fee for its users and Bitcoin’s benefits users usually by dropping the crowding in Mempool. Because this platform can open standardized one-way payment channel contracts with one another.
In these contracts, one party keeps the complete check of transactions and locks up the few bitcoins till the payment sends to another party for the limited time period. Before the timeout, the party who locked up the funds has the ability to send a large number of off-chain transactions by using that locks up bitcoins. whereas, each channel comprises of two on-chain transactions. first one is to open the channel and other is to close it.
These transactions are off-chain, without the blockchain confirmation these transactions are taken as to the simple web page. Luckily, these transactions are economical, means two channel needs minor fees. And, the other ones are completely free of fees.
This payment method is not newborn in the technology era, Satoshi Nakamoto uses the preliminary code for payment channels in Bitcoin’s first release. Today, Bitcoin has the ability to exchange and contrivance these contracts on the blockchain.
Moonbeam is ready to facilitate such type of channels. In this way, heavy volume platform can easily make contact with each other.
Moonbeam is basically the semi-decentralized project. It creates the trust level of its users by providing them secure service. A hosted wallet become custodial account where all the transactions operations are done. Whether it is about to manage the funds or send or receive the transactions. Users don’t have the approach to keys directly, an exchange such as coin base or coin mama works in this manner.
There are few other potential downsides of this platform. When we open these channels, for a time period, committed capital should be in bitcoin among the cost of the capital. If the receiver doesn’t use the channel, the platform will wait to regain the control of funds, demanding heavy financing costs.
Another risk is the use of DNS. This type of attacks includes the rerouting domain name request to attacker’s server. These attacks are mostly used to get payments over to another channel which were meant for the authentic server.
Moonbeam does not require any fork to make it impressive solution and didn’t offer the level of decentralization of a lightning network in bitcoin’s scaling troubles. It may be applied by hosted wallets.