MIT Researchers Claim to Boost Bitcoin and Cryptocurrency Blockchain Transactions By 4x with New ‘Spider’ Routing Scheme
MIT researchers have co-invented a new cryptocurrency-routing scheme that they claim can boost the efficiency… greasing the wheels and creating larger revenues for cryptocurrency and blockchain companies.
An MIT news release stated they are using certain networks designed to speed up notoriously slow blockchain transactions the new solution uses Payment Channel Networks (PCNs), where transactions are completed with minimal involvement from the blockchain. In PCN simulations, Spider processed 95 percent of all transactions using only 25 percent of the capacity needed in traditional schemes.
“Pairs of PCN users form off-blockchain escrow accounts with a dedicated amount of money, forming a large, interconnected network of joint accounts. Users route payments through these accounts, only pinging the blockchain to establish and close the accounts, which speeds things up dramatically. Accounts can also collect a tiny fee when transactions get routed through them.”
The researchers also ran tests on tricky transactions called Directed Acyclic graphs “DAGs,” which are one-directional payments where one user inevitably runs out of funds and needs to rebalance on the blockchain.
“Even with extremely frequent rebalancing, traditional schemes can’t process all DAG transactions. But with very low-frequency rebalancing, Spider can complete them all,” Sivaraman says.
This can add huge value to Bitcoin for instance which currently only processes only a handful of transactions per second, while the likes of Visa and Mastercard process hundreds or thousands per second which is one of the largest barriers facing mass adoption of cryptocurrencies that use Proof of Work (PoW) and public blockchains.
In a paper being presented next month at the USENIX Symposium on Networked Systems Design and Implementation, the researchers, Vibhaalakshmi Sivaraman and Shaileshh Bojja Venkatakrishnan, MIT CSAIL, Kathleen Ruan, CMU, Parimarjan Negi and Lei Yang, MIT CSAIL, Radhika Mittal, UIUC / MIT, Giulia Fanti, CMU and Mohammad Alizadeh, MIT CSAIL in a session called “High Throughput Cryptocurrency Routing in Payment Channel Networks” will introduce “Spider,” a more efficient routing scheme that lets users invest only a fraction of funds in each account and process roughly four times more transactions before rebalancing on the blockchain.
“It’s important to have balanced, high-throughput routing in PCNs to ensure the money that users put into joint accounts is used efficiently,” says first author Vibhaalakshmi Sivaraman, a graduate student in the Computer Science and Artificial Intelligence Laboratory (CSAIL). “This should be efficient and lucrative business. That means routing as many transactions as possible, with as little funds as possible, to give PCNs the best bang for their buck.”
Next, the researchers are exploring data privacy issues and ways to incentivize users to use Spider.