MIT “Spider” Routing May Speed Up Blockchain Transactions

Researchers from the Massachusetts Institute of Technology (MIT) have suggested a new cryptocurrency-routing scheme which can accelerate transactions made on blockchain.

In a January 30 announcement, MIT stated that the new solution named “payment channel networks” (PCN) can remarkably reduce time needed for blockchain transactions to complete, thus boosting profits.

As stated, in PCN, transactions are done with minimum involvement from the blockchain. The release reads:

“Pairs of PCN users form off-blockchain escrow accounts with a dedicated amount of money, forming a large, interconnected network of joint accounts. Users route payments through these accounts, only pinging the blockchain to establish and close the accounts, which speeds things up dramatically. Accounts can also collect a tiny fee when transactions get routed through them.”

While traditional schemes seek the shortest path for the transaction without considering user’s balance, PCN’s employ bidirectional joint accounts, which allow routing payments on channels where sufficient funds are available.

This, as release states, breaks the scenario in which one of the users in the joint account takes too many transactions, which can lead to zero balance and make routing of other transactions impossible.

Splitting full transactions

Besides PCN, the researchers also presented Spider, a technique which splits full transactions into smaller “packets”, which can be transported via different channels at different rates. One of the researchers, Vibhaalakshmi Sivaraman, explained:

“Shortest-path routing can cause imbalances between accounts that deplete key payment channels and paralyze the system […] 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.”

Earlier tech giant IBM was awarded a patent for creating a “self-aware token” which is able to track and record events in an offline transaction. The proposed system relates to processing financial data in an electronic currency platform, as well as to processing e-commerce tokens involving offline transactions.