Researchers at Northwestern University concluded that Bitcoin’s lack of scalability comes from its complete decentralization, suggesting that a compromise is necessary to achieve mass adoption.
Research from Northwestern University suggests that there must be some kind of compromise between central banks and Bitcoin’s ecosystem. The Proof-of-Work protocol currently present in the cryptocurrency’s consensus model is serving as an obstacle to adoption because of the low transaction volume, according to the university.
“When you look at two networks like Bitcoin and a central bank, one is centralized and one is not. If we want it [Bitcoin] to scale we have to compromise, which means we need to get to some level of centralization,”
said Sarit Markovich, clinical associate professor of strategy at Kellogg School of Management at Northwestern University.
We have already seen slightly more centralized models in other cryptocurrencies, such as EOS, where block validators are chosen by votes as opposed to hundreds of thousands of computers engaging in mining.
In collaboration with bloXroute Labs, Northwestern University is reportedly developing a platform that could help resolve what bloXroute calls a “scalability bottleneck” caused by the sheer amount of work that goes into processing one single block on the chain. Their solution aims to increase block sizes while at the same time reducing the amount of time that it takes to process transactions.
We don’t have many details on how this new blockchain would work, but Markovich insists that it already scales 100 times better than Bitcoin. “We’re hoping for 1,000,” he said.
Despite the excitement of the researchers, the news is not encouraging since it proposes more centralization of a cryptocurrency ecosystem from the get-go. It would essentially strip cryptocurrencies of the motivation that inspired people to adopt them for the last 9 years.
Despite all of the problems currently plaguing proof of stake systems, it could help keep a network decentralized while at the same time picking up the pace on block processing. Coupled with zero-knowledge proofs, a coin could essentially add anonymity into the mix, allowing people to have quick and private transactions.
Since we don’t know much about the chain solution that Northwestern University is working on, we could only speculate on just how much it would centralize a cryptocurrency. Nonetheless, using the word “centralization” in one’s thesis isn’t going to encourage the cryptocurrency enthusiast community very much.