The Raiden Network is deemed as the Ethereum version of Bitcoin’s Lightning Network. It is an off-chain ERC20 complaint scaling solution that enables the transfer of tokens within the Ethereum blockchain. Similar to the Lightning Network, Raiden offers a scalable, affordable, quick and privacy-centric transactions.

The purported features of the Raiden are likely to arouse curiosity over how the Raiden Network operates. The seamless transfer of tokens using blockchain technology on the Raiden Network relies heavily on the timely exchange of messaging between the two ends of the transaction.

The messages exchanged between the participating nodes adhere to a specific protocol. Typically, a token transfer message bears information such as the recipient's details, the number of tokens being transferred, the token network being used, the smart contracts, and the blockchain platform.

Each message sent over the Raiden Network is signed to authenticate balances on the underlying blockchain. Also, if a message has to be transferred from node 1 to node 4, it must pass through the nodes in between (node 2 and node 3). This is done to ensure that all transactions on the blockchain network are properly authenticated. Fundamentally, the communication protocol for the Raiden Network focuses on scalability, speed, accessibility, and decentralization.

As of now, users of the Raiden Network have to compromise between privacy and scalability. This is because the network deploys a passive protocol.

Passive protocols ensure privacy by sending encrypted messages to all nodes without disclosing the identity of the recipient. After all nodes receive the message, they attempt to decrypt it using their respective private keys. As expected, only the intended recipient can decrypt the message. Essentially, passive protocols prioritize privacy and anonymity at the expense of scalability, since the sending of messages to the entire network creates latency.

As a result of the challenges mentioned above, the Raiden Network migrated to the Matrix protocol after the release of their latest Testnet called v0.4.0 Icalo.

The Matrix Protocol website describes it as an open standard for interoperable, decentralized and real-time communication over internet protocol. The solution can be used to drive instant messaging platforms, VoIP and WebRTC signaling, Internet of Things communication or in any application that requires a standard HTTP API for publishing data while tracking the history of the conversation.

The reasons why the Raiden Network abandoned passive protocols in favor of the Matrix Protocol Include:

The security of transport in the Matrix Protocol is much better than in the passive protocols. Problems such as the loss of messages during transmission and retransmission are less prevalent in Matrix.

In Matrix, the communication is always initiated from the client side towards the server. This eliminates the possibility of encountering NAT traversal issues.

The Matrix Protocol supports a decentralized configuration of the node network.

The message log feature allows users to send offline messages. However, this functionality is yet to be implemented by the Raiden Network.

Furthermore, Matrix features an inbuilt end-to-end encryption functionality. The fact that it is an open-source standard allows the community to participate in its improvement.

Security of transactions is one of the leading concerns for investors in the cryptocurrency market. The Matrix Protocol reduces the vulnerability of transactions by using transport layer security shielding mechanism for all communication between Raiden nodes and Matrix servers.

Additionally, all Matrix chat rooms are private. This means that only invited users can view the content posted in such rooms. This security feature applies to all users since server operators also require an invitation to access content in the chat rooms. The Olm protocol encrypts message data to prevent malicious individuals from accessing user messages.

As mentioned earlier, the Raiden Network compromises on certain aspects when selecting the transport protocol. In this regard, the community declared that it would persist with the Matrix Protocol until a viable alternative that overcomes scaling issues without overlooking privacy is developed.

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