Definition ∞ Micropayment Channels are off-chain scaling solutions that allow for numerous small, instantaneous transactions between two parties without settling each one on the main blockchain. Only the initial funding and final settlement transactions are recorded on the primary ledger, significantly reducing transaction fees and confirmation times. They enable efficient value transfer for frequent, low-value exchanges. This technology enhances blockchain scalability.
Context ∞ Micropayment channels, exemplified by Bitcoin’s Lightning Network, are a key component in scaling blockchain networks to support widespread daily use and machine-to-machine payments. Current progress focuses on improving their usability, liquidity, and security to facilitate broader adoption. These channels are viewed as essential for enabling new business models that rely on efficient small-value transfers.
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