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New cryptocurrency slashes data usage by 99% compared to Bitcoin

Technology News |
By eeNews Europe

But decentralization leads to a scalability problem. To join a cryptocurrency, new users must download and store all transaction data from hundreds of thousands of individual blocks, which can amount to hundreds of gigabytes of data. They must also store these data to use the service and help verify transactions. This makes the process slow or sometimes computationally impractical. Now researchers from MIT have designed a novel cryptocurrency dubbed Vault, which drastically reduces the storage and bootstrapping costs for new participants.

Described in a paper titled “Vault: Fast Bootstrapping for Cryptocurrencies” to be presented at the Network and Distributed System Security Symposium next month, Vault lets users join the network by downloading only a fraction of the total transaction data. It also incorporates techniques that delete empty accounts that take up space, and enables verifications using only the most recent transaction data that are divided and shared across the network, minimizing an individual user’s data storage and processing requirements.

The paper presents experiments in which Vault reduced the bandwidth for joining its network by 99 percent compared to Bitcoin and 90 percent compared to Ethereum, which is considered one of today’s most efficient cryptocurrencies. Importantly, Vault still ensures that all nodes validate all transactions, providing tight security equal to its existing counterparts.

“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,” says co-author Derek Leung, a graduate student in the Computer Science and Artificial Intelligence Laboratory (CSAIL).


Each block in a cryptocurrency network contains a timestamp, its location in the blockchain, and fixed-length string of numbers and letters, called a “hash,” that’s basically the block’s identification. Each new block contains the hash of the previous block in the blockchain. Blocks in Vault also contain up to 10,000 transactions — or 10 megabytes of data — that must all be verified by users. The structure of the blockchain and, in particular, the chain of hashes, ensures that an adversary cannot hack the blocks without detection.

New users join cryptocurrency networks, or “bootstrap,” by downloading all past transaction data to ensure they’re secure and up to date. To join Bitcoin last year, for instance, a user would download 500,000 blocks totalling about 150 gigabytes. Users must also store all account balances to help verify new users and ensure users have enough funds to complete transactions. Storage requirements are becoming substantial, as Bitcoin expands beyond 22 million accounts.

The researchers built their system on top of a new cryptocurrency network called Algorand — invented by Silvio Micali, the Ford Professor of Engineering at MIT — that’s secure, decentralized, and more scalable than other cryptocurrencies.

MIT – www.mit.edu

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