Statechains: Non-custodial Off-chain Bitcoin Transfer

Non-custodial, because the Statechain and Bitcoin blockchain get updated in tandem (atomically)
Each time the money moves on the Statechain (B to C), an off-chain Bitcoin transaction is created. We use eltoo to ensure that only the final recipient can withdraw the money, without the help of the Statechain entity.
An example of a swap with different assets. User B trades his 2BTC for 200LTC with C.
*It could be argued that a layer cannot be truly censorship resistant if it isn’t trustless — the coins could still potentially get stolen, even if unlikely.

Statechains and The Lightning Network

The channel can be opened on the Statechain without the help or awareness of the Statechain entity.

Enhanced Privacy with Blind Statechains

The Statechain entity is signing blinded messages — it does not know whether these are Bitcoin transactions or something else entirely.
My more in-depth Statechains talk from Scaling Bitcoin ’18 in Tokyo. Also check out the paper.



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