Bitcoin Needs Centralization to Go Mainstream, Says Northwestern University Researchers
Researchers at Northwestern University have claimed that Bitcoin’s lack of scalability is a result of its decentralization model, and a compromise will be necessary to achieve mass adoption.
According to the researchers, the Proof-of-Work consensus algorithm adopted by the Bitcoin community is hindering the cryptocurrency from going mainstream due to the low transaction volume, MarketWatch reported.
“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.
The university did not reveal many details about this new blockchain, but Markovich claims 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.