Hands on State Channel

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# Introduction to State Channels

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# Outline

- "State" and the concept of state
 - Blockchain vs Centralized Solutions 
 - Role o Smart Contract 
 - What goes on-chain and stays off-chain

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# State

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![cointoss](cointoss.jpeg)
State are (Heads, Tails) usually maps to one person (Winning, Losing)

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![tictactoe](tictactoe.png)
State in a Tic Tac Toe game can be [Started, Playing, Won, Loss, Tie]

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# State Channel Characteristics

- Members allowed to interact with it 
 - Rules of the game 
 - Changing of state 
 - Disputing changing state

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# Discussion: Tic Tac Toe on State Channels

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##  Exercise - Architecture

- What are the states required to play Tic Tac Toe on the blockchain? 
 - What about off-chain? 
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# Members of a State Channel

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![cointoss](cointoss.jpeg)
Members of a coin-toss game are the two members who are betting on either Heads/Tails.

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![tictactoe](tictactoe.png)
Members of a tic-tac-toe game are the two members who are making the X O moves.

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# Rules of Tic Tac Toe

- Once player A plays, it's player B's turn 
 - A Player wins when there are three consecutive letters in one direction 
 - It is not necessary for a game to have a winner
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# State Channel Smart Contract

- State channels is the third party arbitrator 
 - Defines the rules of the game 
 - Handles paymets, if necesssary
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# Discussion: How do smart contracts verify information?

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# Signatures
 - Assumption: Owner of the private key is the owner of the account 
 - Signs data using the private key
 - Like an unfforgeable signature on an important letter
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# The state of a state channel should NEVER change without a dispute period.

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# Dispute Period

- A finite amount of time where both parties are allowed to provide updated signatures 
 - Failsafe: In case a party tries to replay an old signature

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# Lab

Architect your smart contract by defining the following interface:

- List your public methods 
 - Have at least 3 states 
 - Identify parameters/arguments/return values of functions 
 - One function has to take signatures 
 - Identify where you would need a dispute period