Will MIT Developers Create a New Faster and More Efficient Cryptocurrency than Bitcoin?
MIT researchers seem to have developed a new cryptocurrency that is expected to be faster and more efficient than the popular digital asset Bitcoin (BTC). The information was released by the MIT back on January 23.
The main intention behind this virtual currency is to drastically reduce the data that users need to join the network and verify transactions. Compared to Bitcoin, this cryptocurrency consumes 99% less energy and the network is much more scalable.
Bitcoin and other virtual currencies work on top of blockchain technology and for processing transactions, users have to store all the data from transactions. This is something that requires a lot of space and makes the whole process slow and impractical for many users.
According to a paper that will be presented at the Network and Distributed System Security Symposium, MIT researchers will be introducing Vault. This virtual currency allows individuals to join the network just by downloading a fraction of the total transaction data. Moreover, it incorporates techniques that delete empty accounts and that take up space.
The new cryptocurrency reduced the bandwidth for joining the network by 99 percent compared to Bitcoin. If the bandwidth is compared to Ethereum (ETH), they were able to reduce it by 90%.
The co-author Derek Leung, commented about it:
“Currently there are a lot of cryptocurrencies, but they’re hitting bottlenecks related to joining the system as a new user and to storage. The broad goal here is to enable cryptocurrencies to scale well for more and more users.”
Users that want to download the Bitcoin network would have to download 500,000 blocks, equal to about 150 gigabytes. At the same time, users must store all account balances to help verify new users and ensure they have funds to complete transactions. It is worth mentioning that storage requirements are becoming substantial, thus, being less accessible for individuals.
The new digital asset has been built on top of a crypto network called Algorand, that was invented by Silvio Micali, the Ford Professor of Engineering at MIT. The network is secure, decentralized and it also can scale more than other virtual currencies.
Algorand uses a proof-of-stake (PoS) consensus algorithm to process transactions in an efficient way compared to proof-of-stake.
In order to make the network more efficient and scalable, the researchers designed a sharding scheme that divides transaction data into smaller portions that are shared across the network. This allows individuals to process small amounts of data to verify transactions.
So as to implement sharding in a secure way, Vault uses Merkle Trees. The top node contains a single hash that is called the root hash. The tree combines each pair of children hashes along the bottom to form their parent hash. That repeats the process up to the tree, assigning a parent node from each pair of children nodes.
With Vault it is possible to separate shards assigned to separate groups of users. If a user needs to verify a transaction from outside of their shard, it is possible to trace a path to that common layer.
Furthermore, researchers designed a scheme in which it is possible to recognize and discard user’s assigned shard accounts and that had zero balances for a certain length of time.
Bitcoin has been in the market for ten years and it has proven to be a very resilient cryptocurrency. There are other digital assets that have also been launched to the market and that aimed at improving the Bitcoin’s network. However, Bitcoin remains the most popular digital asset in the market and the dominant network in the crypto space.