Researchers use process similar to packet switching for streamlined crypto transactions. Industry collaboratives, consortiums and vendors have been working to address the problem with scaling blockchain-based cryptocurrency transactions, both in terms of size and efficiency.
If successful, digital currency could rival traditional banking and even make credit cards obsolete, as a person’s bank account and credit would be tied to a public-private key infrastructure they – and not the bank – would control.
Despite the growing adoption and use of cryptocurrencies, the ability to make fast payments at scale using blockchain remains a challenge. To that end, MIT researchers have developed a more efficient transaction routing scheme called Spider that they say can speed up the movement of cryptocurrency four-fold. The researchers plan to present more details about the technology at USENIX Symposium on Networked Systems Design and Implementation in late February.
Current cryptocurrency networks allow only small amounts of data per block and take several minutes to process each transaction. For example, Bitcoin ledgers average a throughput of between 3.3 and 7 transactions per second (TPS), while Ethereum reaches between 10 to 30 TPS. By comparison, Visa’s networks process about 1,700 transactions per second (TPS) on average – and even more at peak load.
While open and efficient because transactions in the peer-to-peer distributed ledger technology can be seen in real time, the blockchain performance problem is real. That’s because every entry on a blockchain requires every node to process it, or come to a consensus on it.
Transacting off blockchain, known as ‘layer 2’ topology, enables bidirectional processing, bypassing the distributed ledger’s inefficiencies while still using its immutable properties to record completed transactions in a transparent way.
While there has been an emergence of scalable, bidirectional payment channel networks (PCNs), such as the Lightning Network and Raiden Network, completing payments on PCNs remains challenging. Bidirectional PCNs still face channel saturation because smart contract scripts controlling them automatically route transactions along the shortest path. The result? Some escrow accounts are depleted more quickly than others.
Because current inefficient routing schemes deplete users’ account balances frequently, the users must keep a lot of money in each account or frequently rebalance their accounts on the blockchain.
PCNs rely heavily on bidirectional joint accounts – where both parties can receive and send money – so money can be routed between any users. User B can have a joint account with user A, while also linking separately to user C. Users A and C are not directly connected, but user A can send money to user C via the A-B and B-C joint accounts, according to the researchers.
“Shortest-path routing can cause imbalances between accounts that deplete key payment channels and paralyse the system,” Vibhaalakshmi Sivaraman, lead author and a graduate student in MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL), said in a statement. “Routing money in a way that the funds of both users in each joint account are balanced allows us to reuse the same initial funds to support as many transactions as possible.”
The researchers also adopted an algorithm that monitors data centre congestion to identify queueing delays at congested accounts, which helps control the rate of transactions.
“Say user A sends funds to user C through user B, which has a long queue. The receiver C sends the sender A, along with the payment confirmation, one bit of information representing the transaction’s wait time at user B,” the researchers said. “If it’s too long, user A routes fewer transactions through user B. As the queueing time decreases, account A routes more transactions through B. In this manner, by monitoring the queues alone, Spider is able to ensure that the rate of transactions is both balanced and as high as possible.”
The Spider topology allows cryptocurrency network users to invest only a fraction of funds in each account associated with a network and process roughly four times more transactions ‘off chain’ before rebalancing on the blockchain. techcentral.ie