Researchers from the Massachusetts Institute of Technology say they’ve developed a new routing scheme that can boost the speed of cryptocurrency transactions by four times.
The Spider routing solution “packetizes” transfers and increases the throughput of cryptocurrencies by using a multi-path transport protocol in payment channel networks (PCNs). Through packetization, Spider can complete large transfers on low-capacity payment channels. In addition, the researchers claim that “the multi-path congestion control protocol ensures balanced utilization of channels and fairness across flows.”
The new technology is similar to the packet switching techniques commonly used in internet communications. The solution also uses queue management to alleviate network congestion issues.
In addition, Spider needs less than a quarter of the funds that other solutions, such as the Lightning Network and Raiden Network, require to initiate the transfer.
MIT researchers conclude,
“Through extensive simulations, we show that Spider requires less than 25% of the funds needed by state-of-the-art approaches to successfully route over 95% of the transactions on balanced traffic demands, and requires only one on-chain transaction for every 10K transactions routed to achieve full throughput on imbalanced demands.”
While cryptocurrency adoption has grown over the years, the delivery of fast payments at scale remains a huge obstacle. Bitcoin can handle 4.6 transactions per second (TPS) while Ethereum can process up to 15 transactions per second. These numbers pale in comparison to Visa’s 1,700 TPS.
Developers are working to circumvent the issue of scalability by introducing layer-two payment channel networks (PCNs) such as the Lightning Network and Raiden Network. These solutions increase the network’s ability to process payments by settling transactions off-chain. However, PCNs come with their own set of challenges.
For instance, they require users to deposit funds in escrow accounts. In the current scheme, the funds of some escrow accounts are exhausted more quickly than others.
According to Rob Matheson of MIT’s Computer Science and Artificial Intelligence Lab,
“Traditional schemes send transactions along the shortest path possible, without being aware of any given user’s balance or the rate of sending on that account.
This can cause one of the users in the joint account to handle too many transactions and drop to a zero balance, making it unable to route further transactions.”
In addition, current PCNs can only send payments in full. If a whale wants to transfer 100 BTC, the PCN will try to find the shortest route to process the payment. If the path cannot support all 100 BTC, it will try to find the next route and so on. The result? The transfer freezes or fails.
The Spider deals with these issues by dividing the transaction into bite-size packets that are dispatched across multiple channels at various rates.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
The post Will MIT Transform Bitcoin (BTC)? New Tech Promises to Dramatically Boost Speed of Cryptocurrency appeared first on The Daily Hodl.
Source: The Daily Hodl