Abstract: 

Permissionless cryptocurrencies like Bitcoin are revolutionary but come with limitations - notably, they can handle only an extremely limited number of transactions per second. Enter Payment Channel Networks (PCNs), which let two users exchange numerous transactions with a minimal blockchain footprint. Imagine it as setting up a temporary tab with a friend, recording the final result instead of each tiny transaction.

But PCNs are not perfect. They often require the use of intermediaries for routing payments, which means added fees and potential privacy concerns. Furthermore, their design primarily supports payments, leaving out numerous other fascinating blockchain applications.

In this talk, we will dive into these challenges and introduce virtual channels (VCs) - a novel approach designed to address these limitations. VCs allow users to bypass intermediaries with temporary, off-chain channels and can host a wider range of applications, thus providing a cheap and generic solution for having scalable applications on Bitcoin and other cryptocurrencies.