On October 26, 2018, Interstellar, the product of Chains acquisition by Stellar, announced a new implementation called “Starlight” that enables secure, private bi-directional payments via the Stellar protocol.
Payment Channels
The purpose of these payment channels is to allow different parties to conduct private and secure transactions for free without having to trust the other party.
Thanks to the networks Jeremy Rubin, Jed McCaleb, Nicolas Barry, David Mazieres, Akash Khosla and others, the Stellar offers a payment channel network that allows two users to trade with each other without relying on the network.
Unlike standard transactions, where fees and disclosure of information are available to all observers because the network must acknowledge them, Starlight will allow users to open a payment channel to conduct transactions privately.
The payment channel uses the network to “lock up” the means to be used by active subscribers on the channel. Once both parties have opted for a payment channel, they can complete transactions without having to continue working on the network and make the solution a private, instant and free payment solution.
Channel security through network-validated information, including signed Stellar transactions that are not published on the network before closing the original payment channel. Once both participants have completed their offers, the payment channel closes and the transactions are sent to the network and validated for inclusion in the blockchain.
Although the network can see the amount allocated to the payment channel, the full transaction history is not accessible because only the final billing balances are disclosed to the network when the channel is closed. This means that all other activities remain private and known only to the participants.
The Interstellar team indicated that the Starlight payment channels are very similar to the Bitcoin payment channels in the Lightning network. The additional support aims to support not only payment channels but also multi-hop payments through these channels. Interstellar wants to continue its evolution by looking for compatibility with other payment channel systems such as Lightning and Interledger.