What is the difference between so-called generalized and payment state channels

There is confusion from many outside of the community about what ‘universal’ means in reference to Trinity as a scaling solution. Some are under the impression that Trinity is just “payments” whereas other scaling solutions are being classed as “generalised state channels”, how can you elaborate to suggest Trinity is more than just “payments”.

The dispute over payment channels and universal state channels is a result of the target of scaling, instead of the channel itself.

The core idea underlying payment channels and universal state channels is the same: changing the specific usage of the protocol to achieve scalability while keeping the operation mode of the bottom layer protocol as it is.

Let’s put the case to BTC. As BTC is non-turing complete and doesn’t have the concept of smart contract, its function is just payment. Thus, the Lightning Network built on BTC is often referred to as payment network.

When you apply the core idea to NEO/ETH, you will find that NEO/ETH are turing complete and support smart contract. In addition to the function of payment, they can manifest the state of smart contracts. Therefore, Trinity, which is built on NEO/ETH, is always referred to as a state channel.

However, many smart contracts (e.g., Nep-5 on NEO and ERC-20 on ETH) today are ledgers that largely deal with token payment rather than specific events, which leaves us a misconception that state channel is only a payment channel.

With the development of blockchain technology, smart contracts will become a logical convention for dealing with specific events. When they gradually mature, the off-chain state channels for the contracts will be much easier to understand.