The Switzerland-based non-profit organization Distributed Technology Research Foundation (DTR) Foundation is behind a new cryptocurrency development effort, called Unit-e, that has seven major universities collaborating on a solution for blockchain’s scalability and performance problems in hopes of thwarting waning public confidence. Among those universities are big names like The Massachusetts Institute of Technology (MIT) and Berkley.
The blockchain-based payment system is expected to surpass established networks in transactional capability, aiming to achieve throughputs of 5,000 to 10,000 transactions per second. To put that in perspective, Visa’s networks process about 1,700 transactions per second (TPS) on average, Bitcoin averages 3.3 -7 TPS, and Ethereum reaches 10-30TPS.
Joey Kreg, a member of DTR’s Foundation Council and co-chief investment officer at hedge fund Pantera Capital says that lack of scalability is holding back cryptocurrency adoption. “DTR’s groundbreaking research is addressing this,” he says. “The Unit-e developers are turning this research into a real scalable performance which will benefit a huge swath of decentralized financial applications.”
Unit-e uses a different algorithm than most popular cryptocurrencies: Proof of Stake (PoS) instead of Proof of Work (PoW), and it also will use new applications of sharding, a method of spreading out computational workload over a peer network. The new sharing method, called “polyshard” is a storage and computation solution that gains efficiency without compromising security.
Coupled with the PoS consensus algorithm is a new routing algorithm for payment channel networks. The payment networks will allow Unit-e users to verify transactions instantaneously without waiting for confirmation from the blockchain, claim researchers.
Giulia Fanti, a lead researcher for DTR and assistant professor of Electrical and Computer Engineering at Carnegie Mellon University, said in a statement, “Our approach is to first understand fundamental limits on blockchain performance, then to develop solutions that operate as close to these limits as possible, with results that are provable within a rigorous theoretical framework.”
Unit-e is designed to meet five requirements in a fully-decentralized manner: security, latency, throughput, usability, and privacy.