Seven major universities are working together to develop a digital currency network that solves blockchain 's scalability and performance problems before public confidence in the technology erodes.
Funded by a Swiss-based non-profit organization, the cryptocurrency application, called Unit-e, and its blockchain-based payment system is expected to be launched in the second half of this year; it would surpass even mainstream financial networks like Visa's VisaNet in transactional capability.
The Distributed Technology Research Foundation (DTR) Foundation, the Swiss organization behind the new Unit-and cryptocurrency development effort, was formed to promote open distributed networking technology. In an academic paper, DTR explained the need to build a decentralized trust system "is broad and pressing."
The Massachusetts Institute of Technology (MIT), Stanford University, Carnegie Mellon University and the University of California, and Berkeley are collaborating on the new payment network. The effort was unveiled Thursday.
DTR researchers have written, in some cases published in peer-reviewed publications, 10 research papers. In those papers, they describe a decentralized payment system as the "killer app" for blockchain, akin to what email was for TCP / IP.
"A lack of scalability is holding back cryptocurrency adoption," said Joey Krug, a member of DTR's Foundation Council and co-chief investment officer at hedge fund Pantera Capital, a backer of Unit-e. "The Unit-e developers are turning into a real scalable performance that will benefit a huge swath of decentralized financial applications."
Unit-e cryptocurrency aims to achieve transaction, "DTR said in an academic paper published this month.
"Although some cryptocurrencies achieve comparable latencies today," DTC said. "We are targeting throughputs of 5,000 to 10,000 transactions per second."
By comparison, Visa's networks process about 1,700 transactions per second (TPS) on average, and more at peak load. When combined with blockchain-based networks, Unit-and theoretically leaves them in the dust. Bitcoin 's current average throughput is estimated between 3.3 and 7 TPS, and Ethereal range between 10 to 30 TPS, the researcher noted.
"Bridging this large gap is technically nontrivial and requires significant innovation," the researchers stated in their paper. "20mbps network physically can not handle the transaction", we note that the target is through the physical limits of a typical modern P2P network.
DTR is not alone in its mission to boost the performance and scalability of blockchain. Earlier this month, start-up Devvio its highly efficient distributed ledger protocol can address all the major problems facing blockchain networks, including scaling for global financial business by executing up to eight million TPS.
Unit-e uses at Proof of Stake (PoS) This is a consensus algorithm that is more efficient and computationally less than taxing than Proof of Work (PoW), the algorithm used by the most popular cryptocurrencies, such as bitcoin and ethereum. Called the new protocol, called "Prism," is able to "approach the limits of what is physically possible in a blockchain." They are coupled with the PoS consensus algorithm with new routing algorithms for payment channel networks.
In addition, Unit-e will use "all new ways of sharding," a method of partitioning used to spread out the computational workload across a peer-to-peer network.
Payment channel networks will act as "overlay networks" that use on-blockchain consensus to set up escrow accounts (or channels) The payment networks will allow users to verify transactions instantly without waiting for confirmation from the blockchain.
"The main delay stems from the transaction to the container, which is a fast, point-to-point operation that can be used as a second for direct channels," the researchers said.
PoS consensus algorithms are being explored by multiple blockchain standards organizations. For example, last year, Ethereum introduced to PoS mechanism on a testnet called "Casper" (as in Casper the friendly ghost).
The PoS consensus protocol creates "bonded validators," or users who must be a part of the blockchain consensus or voting community. As long as bonded validators act honestly on the blockchain, they can remain in the consensus community; if they attempt to cheat the system, they lose their stake (their money).
Ethereum's Casper PoS system would enable a consensus mechanism to process new transactions in about four seconds.
"In the 10 years since Bitcoin first emerged," a researcher for DTR and assistant professor of Electrical and Computer Engineering at Carnegie Mellon University, said in a statement . "Our approach is fundamental to blockchain performance", then "to development".
Unit-e uses a new sharing mechanism called "PolyShard" a storage and computing solution that grows more efficient with more users without sacrificing security, according to DTC. The key is that it mixes up data from different users and transactions.
To become a ubiquitous global payment system, the unit is designed to meet the five requirements in a fully-decentralized manner:
- Security. The system should prevent unauthorized or invalid payments from being executed.
- Latency. Transactions should be processed seamlessly, on the timescale of seconds.
- Throughput. To network of transactions per second.
- Usability. The system should be accessible at all times, and low cost and predictable fees.
- Privacy. The system should prevent unauthorized parties from accessing transaction log.
Babak Dastmaltschi, chairman of the DTR Foundation Council, said in a statement "The blockchain and digital interest markets are at an interesting crossroads. These are transformative times We are nearing the point
"Advancements in distributed technologies will enable open networks, avoiding the need for centralized authorities," Dastmaltschi said. "DTR was formed with the goal of enabling and supporting this revolution."