There are papers about multi hop virtual payment channels emerging like the Perun paper or more recently the Donner Paper.

The idea seems to be to reserve some liquidity on a path (or potentially flow) of channels between two peers for a longer time to effectively give them a virtual channel in which they can transact as if they had a direct channel.

Why is that better then just using the available liquidity every time one wishes to transact?


The key is that if the intermediary node use the available liquidity every time one wishes to transact, then the intermediate nodes will need to participate in every payment.

Suppose Alice needs to transact frequently with Carol, and there is no direct channel between them, so they create a "virtual channel" through Bob. Then until the virtual channel expires, Alice can transact directly with Carol without Bob's involvement via the virtual channel.

So, Virtual channel pulls Bob out of the frequent updating channel state. I think this is the advantage of virtual channels over regular multi-hop payments.

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