The Limitations of State Channels

State channels are extremely capable and powerful tools. It is important to understand where state channels cannot be used, however. There are two main categories of case to be considered.

First, state channels cannot be used in situations where the designated group of users is open, where anyone can join at will without needing permission or assistance. Examples of this would include name registries and auctions that expect to offer anti-censorship properties equivalent to the underlying blockchain.

Second, state channels cannot be used in situations where participants may disagree about the availability of some data.

To be completed