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Raiden is a technology which brings scalable, low latency, low cost token transfers to Ethereum. It leverages a network of payment channels to facilitate transfers between any two participants. Transfers happen off-chain, i.e. they are not transactions that hit the blockchain, which is only used to manage deposits. The technology is very similar to the proposed Bitcoin Lightning Network.
The Raiden software implements a p2p application which connects to a local Ethereum node as well as other instances of the Raiden client. The network of these clients thus is the Raiden Network.
A simple payment channel is created by a user (Alice) who sets up a deposit on the blockchain for a certain payout address (Bob). Alice can then sign messages off-chain indicating how much she owes Bob. The signed amount increases with every payment. Bob can claim the amount from the deposit on the blockchain by providing the message signed by Alice. As he's the only possible payout address for the deposit, he can be sure that Alice will not double spend.
As the signed messages don't hit the blockchain (except for the last one, when closing the channel), off-chain transaction are scalable, have low latency and low cost.
The problem with payment channels is, that users need to lock up tokens as a deposit for every possible receiver. Ideally one would only have one deposit which can be used to pay many not previously known payees.
If all users open a small number of payment-channels than a network of payment channels emerges where a path between any two participants can be found. Say Alice wants to pay Charlie but has no payment channel with Charlie. She then can still pay Charlie if both have a payment channel with Bob, who would mediate the transfer. Cryptographic techniques are used to guarantee, that Bob could not cheat.
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We are aiming for a populated test network in Q3/2016.
We are aiming for Q4/2016.
Join our gitter channel https://gitter.im/raiden-network/raiden