New research to pave the way for faster crypto transactions
Faster cryptocurrency transactions might be the result of a new research project at the IT University of Copenhagen aiming to improve blockchain protocols. The project is funded by a DKK 1.7 million grant from the Concordium Foundation.
Written August 21, 2019 5:53 AM by Vibeke Arildsen
As hyped as blockchain and cryptocurrencies have been for the past years, the technologies still have not found their way into the daily lives of most people. Limitations when it comes to the speed and efficiency of transactions is part of the reason why, says Bernardo Machado David, Associate Professor at the IT University of Copenhagen.
»For example, the Bitcoin system can only perform around 7 transactions per second. By comparison, the VISA network can process 100.000 transactions per second.
Bernardo Machado David, Associate Professor
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“For example, the Bitcoin system can only perform around 7 transactions per second. By comparison, the VISA network can process 100.000 transactions per second. In practice, this means that transferring money to someone through Bitcoin can take hours and hours. This is of course not good for day-to-day applications,” he says.
The problem is linked to the way blockchain systems are constructed today, he explains.
“For most of the systems used today, we have reached the limit of the number of people that can join the network and help the blockchain grow faster. We have reached the capacity of information that can be added to the blockchain per second,” says David.
Faster transactions
In the new research project, researchers at the IT University of Copenhagen aim to design more efficient and scalable mechanisms, so-called blockchain consensus protocols, that will allow for faster transactions and enable the systems to support a much larger number of users.
“Instead of having one single blockchain hold more information, we are looking into having several parallel blockchains working in concert, in order to have more information added per second,” says David.
In order to accomplish this, the researchers will use a technique called sharding, which is typically used in database systems. Bernardo Machado David compares this method to the way computer processors in the late 1990’s and early 2000’s went from having increasingly powerful single-core processors to having many processors working together inside one computer.
At the same time, the project will focus on accountability and maintaining privacy for users.
»[T]he work also involves designing systems in a privacy-preserving way, and in a way that allows for investigations in the case of illegal activities.
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“We don’t only want more scalable systems, we also want systems that are compatible with privacy and accountability regulations. So the work also involves designing systems in a privacy-preserving way, and in a way that allows for investigations in the case of illegal activities,” says David.
Funding from the Concordium Foundation
The project is funded by a DKK 1.7 million research grant from the Concordium Foundation. The foundation, which is chaired by Danish business man Lars Seier Christensen, is currently developing a new blockchain-based currency and smart contract system.
»With faster transactions, ordinary people could use blockchain systems to make everyday transactions like paying for coffee or transferring small amounts to their friends in a transparent and seamless way.
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“It is very interesting to be doing this project in collaboration with Concordium, since the research will make its way into real-world solutions. We hope to make blockchain systems usable for more than storing wealth and transferring large sums. With faster transactions, ordinary people could use blockchain systems to make everyday transactions like paying for coffee or transferring small amounts to their friends in a transparent and seamless way,” he says.
Bernardo Machado David, Associate Professor, email beda@itu.dk
Vibeke Arildsen, Press Officer, phone 2555 0447, email viar@itu.dk