In what is probably the institution’s broadest effort in the Bitcoin space to date, the American National Science Foundation (NSF) has awarded a three year grant worth US$3 million for research on the science and applications of cryptocurrency.

New wave of disruption

The research project is led by Cornell University's Elaine Shi, and includes faculty members from Cornell, the University of Maryland, and UC Berkeley, hence combining crypto researchers with programming languages researchers and system builders.

As can be read in the abstract of the project, the NSF believes that Bitcoin and blockchain technology will severely impact and shape the future of money. The foundation considers cryptocurrencies a new wave of disruption, and as such believes the topic demands more research and understanding than is currently available.

The abstract reads:

“Unfortunately, usage of crypto-currencies outstrips our understanding. […] This work aims to establish a rigorous scientific foundation for crypto-currencies. To achieve this, this work blends cryptography, game theory, programming languages, and systems security techniques.”

Speaking to Cointelegraph, the projects co-PI (Principal Investigator), Cornell's Emin Sirer, further explained:

“We plan to investigate the fundamental principles of cryptocurrency protocols, develop programming language support for smart contracts, and open-source secure systems infrastructure for cryptocurrency services, such as exchanges.”

In particular, Sirer explained that the project sets out to solve real-world problems Bitcoin is facing today. One of the research topics, for instance, is Bitcoin's scalability, a subject that has as of late attracted a lot of heated debate, in particular regarding the block size limit.

Sirer:

“My group has been hard at work looking into how to make Bitcoin scale better, how to simulate the Bitcoin network realistically, and how to build databases and web servers that can securely handle valuable assets, like cryptocurrencies.”

- Emin Sirer

The project will not be limited to Bitcoin, however. Notably, the NSF indicates to expect that improved cryptocurrency designs could emerge from the research.

The abstract reads:

“Expected outcomes include new crypto-currency designs with provable security properties, financially enforceable cryptographic protocols whose security properties are backed by enforceable payments in case of a breach, smart contract systems that are easy to program and formally verifiable, as well as high-assurance systems for storing and handling high-value crypto-currencies and transactions.”

The NSF is a Unites States government research agency whose goal it is to promote the progress of science. With an annual budget of US$7.3 billion, the NSF funds some 24 percent of all federally supported basic research conducted by American colleges and universities. The cryptocurrency research will take place under the NSF division Computer and Network Systems (CNS).

Cornell University has published several papers on Bitcoin and cryptocurrency so far. The best known of these is probably a 2013 paper by Ittay Eyal, which argued that less than a majority of Bitcoin miners could in theory successfully attack the network. Last week, Eyal published a new paper under Cornell University's wings, in which he claims that mining pools will probably shrink in size over time.

Cointelegraph reached out to the NSF, but received no response at time of publication.