- The MIT has introduced a routing solution to achieve better performance in payment channels such as Bitcoin’s Lightning Network or Ethereum’s Raiden.
- The solution was presented as “Spider” and packetizes the transactions through a multi-path transport to improve scalability.
A group of researchers from three prestigious U.S. universities, including the Massachusetts Institute of Technology (MIT), Carnegie Mellon University and the University of Illinois, have presented the Spider routing solution. This solution will enable payment channel networks (PCN) such as Bitcoin’s Lightning Network and Ethereum’s Raiden to a better performance, improving scalability and thus expand the potential use of cryptocurrencies.
Overcoming Bitcoin’s greatest weakness
The research concludes that cryptocurrencies cannot extend their usage because they suffer from poor scalability. This prevents them from becoming viable alternatives to traditional payment systems such as VISA. In comparison, the Bitcoin network is currently capable of processing 7 transactions per second (TPS), the Ethereum network 15 TPS and the VISA network an impressive 1,700 TPS.
Research indicates that the problem behind the low scalability is the underlying consensus protocol:
[…] each transaction must go through a full consensus to be confirmed, which can take from several minutes to hours.
Payment channel networks (PNCs) such as Bitcoin’s second layer payment solution, the Lightning Network, emerged to mitigate the scalability problem. However, this solution has proven to be economically inefficient and, according to a Bank of England study, is increasingly centralized. In addition, the above mentioned research mentions three main problems that describe the poor performance of current PNCs:
- They try to route all incoming transactions atomically and instantly while they harm the process of sending large transactions.
- Existing payment protocols are unable to keep PNCs “balanced”. In other words, when one of the parties in the payment channel runs out of funds a “refill” of the channel has to be done through an on chain transaction.
- PNCs are deadlocked in particular scenarios.
The solution proposed by the research is called Spider, a multipath transaction protocol that according to the research:
achieves a high balanced routing performance in PNCs, based on the concepts of a previous position paper. […] Spider issuers “packetizes” transactions, dividing them into transaction units that can be sent through different paths at different rates. […] this packet-switching approach allows large payments to be sent in low-capacity channels over a period of time. […] Spider develops a simple multi-path congestion control algorithm that promotes channel balancing while maximizing performance.
The research states that the problem of routing and the improvement in PNC performance capacity increases significantly by enhancing the balance in the payment channel. Therefore, the congestion control protocol in the PNCs is crucial in the Spider solution. The underlying algorithm that controls multipath congestion in the solution is similar to the MPTCP control protocol developed for the Internet.
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Spider could set a milestone to increase scalability at PNCs and give a big boost to the adoption of cryptocurrencies. In addition, transactions in Spider require 25% less funds and only one on chain transaction per 10,000 transactions, which would represent an important improvement for Bitcoin’s network and the development of the crypto ecosystem.