MIT Explores Bitcoin Lightning Network to Handle Huge Transactions
A work is underway to take bitcoin to the next level.
The Massachusetts Institute of Technology (MIT) is currently experimenting on bitcoin lightning network powered with smart contracts to exhibit how it can facilitate not only huge volume of transactions, but do so with a high-level complexity.
Digital Currency Initiative (DCI), the research group of the university’s MIT Media Lab, revealed last week it has been working on a lightning network node. DCI visualizes a system in which transactions would automatically occur in the event of external events or factors such as the movement in the stock markets worldwide.
For the research project, the group will do so by using oracles, trusted entities responsible for transmitting data to smart contracts. Researchers Tadge Dryja and Alin Dragos developed a test oracle to broadcast any data. This is a standalone feature in which any data can be sent such as the latest price of the US dollar, weather forecast, or stock market data, to satoshis on the smart contracts. Satoshis is the smallest unit of bitcoins.
The oracle is necessary for MIT researchers to implement the lightning network called lit.
Dragos and other MIT researchers believe that bitcoin, with the help of lightning network, might level up the capabilities initially envisaged by its previous users. Bitcoin alone cannot give off the scaling it desires. To boost the virtual currency’s scalability, they thought of adding lightning network.
According to Dragos, while smart contracts are normally associated with ethereum that has a richer scripting language, bitcoin is able to do similar things. He said incorporating bitcoin entails a tinge of creativity, adding bitcoin is not as developer-friendly.
In the case of smart contracts, one can make a bid on what can happen next in, say, on what can happen in the world next week. For instance, Ben promised Christine to pay her whatever is the value of a Canadian dollar in satoshis on Friday. So, if a loonie is worth 10,000 on that day, he needs to pay her that amount.
Aside from that, it provides privacy since oracles have no way of knowing the person that uses the data for broadcasting. For this work, it uses Dryja’s discreet log contracts mechanism.
The demo has already been finished, both Dragos and Dryja acknowledged they still need to do a lot of work and answer a lot of uncertainties. Also, the team is finding a way to minimize the trust on the oracle to allow a user to utilize several oracles in one go.
The team has not yet produced an application that is easy to access and navigate. However, it has created a prototype showing how this works. Dragos mentioned UX is not DCI’s primary expertise.
At present, DCI is collaborating with several firms to implement this technology, recognizing the need to stop working on the bitcoin lightning network and pass it on to someone else. They hope major companies would be better at understanding what people want from the software.
This is open to entities that intend to use oracle for whatever reason and then decide if it is worth giving a shot at the very least.
Dragos said he won’t be able to predict how people intend to use the technology but new ones always emerge, meaning it is not necessary to devise a new one.
In 2015, DCI started designing the scaling solution to develop upscale and intricate scaling on the Bitcoin network. Essentially, this is the university’s one way of furthering the research and development on cryptocurrencies.
DCI is created to conduct due diligence on topics related to blockchain and digital currencies, act as a neutral convener for public and private sectors to test concepts with high social impact, promote diversity and inclusion in the development and adoption of this technology, and empower MIT students to further innovation in this technology.