Researchers develop low-cost, energy efficient alternative to Bitcoin
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Researchers from an institution in Lausanne, Switzerland, have invented a nearly zero-energy alternative to the cryptocurrency Bitcoin.
According to researchers from the Technical University of Munich (TUM) in Germany, Bitcoin as a digital asset is limited by large electricity consumption and has an outsized carbon footprint.
To overcome this issue, Professor Rachid Guerraoui from the School of Computer and Communication Sciences (IC) at Ecole Polytechnique fédérale de Lausanne (EPFL) has suggested that while a nearly zero-energy alternative sounds too good to be true, it all comes down to our understanding of what makes transactions secure.
The system, which Guerraoui and his team developed in his Distributed Computing Lab (DCL), represents a shift in how we think about cryptocurrencies and digital trust in general. Guerraoui uses the legal metaphor: all players in this new system are “innocent until proven guilty.”
Compared to the tradition Bitcoin model – which relies on solving a difficult problem called "consensus" to guarantee the security of transaction – this newly developed model ensures that everyone in a distributed system must agree on the validity of all transactions to prevent malicious players from cheating, e.g. by spending the same digital tokens twice (a practice known as 'double-spending').
To prove their honesty and achieve consensus, players must execute complex – and energy-intensive – computing tasks that are then verified by the other players. However, in this new system, Guerraoui and his colleagues flip the assumption that all players are potential cheaters on its head.
“We take a minimalist approach. We realise that players don’t need to reach consensus; they just need to prevent malicious behaviour when it manifests,” he said. “We assume everyone is honest and if players see someone trying to do something wrong, they ignore that player – and only that player.”
With the consensus requirement removed, the DCL’s new system, dubbed Byzantine Reliable Broadcast, can achieve safe cryptocurrency transactions on a large scale with an energetic cost of virtually zero.
Guerraoui added that such cost is “roughly equivalent to that of exchanging emails” and just a few grams of CO2 compared to an estimated 300kg for a single Bitcoin transaction.
According to the team, this could be a big advantage over Bitcoin, which has been reported to have a global electricity consumption approaching that of Austria and a global carbon footprint comparable to that of Denmark.
The team added that in addition to its lower cost and energy expenditure, the Byzantine Reliable Broadcast system sacrifices nothing in terms of transaction security.
While it has a narrower range of applications than Bitcoin – being suitable only for cryptocurrencies and not for more complex transactions such as smart contracts – the system can manage other forms of currency besides money, he said.
“It could be used for an abstract cryptocurrency for exchanging goods, like bikes in a bike-sharing program, for example,” Guerraoui added.
Guerraoui and his colleagues plan to release this new system as an open-source code for anyone to download and use by the end of 2020.
As well as this new low-cost alternative to Bitcoin, earlier this year social media giant Facebook proposed the launch of a new cryptocurrency, called Libra. However, this potential stablecoin will have to overcome major challenges and controversy before it can become a legitimate cryptocurrency.
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