The US-based university MIT tests the combination of bitcoin’s lightning network and smart contracts to handle millions of transactions with a higher degree of complexity, reported Coindesk on May 23.
The test was initially designated with the school’s Digital Currency Initiative as a way to study more deeply cryptocurrencies, and it is outlining a system in which transactions would automatically be executed in the case of specified external events, for example, the present price of the U.S. dollars.
The MIT uses “oracles”, which are trusted entities used to transmit data to smart contracts to make this possible. The researchers Tadge Dryja and Alin S. Dragos created a test oracle to relay in satoshis the price of U.S. dollars, which can be taken by anyone to use in their smart contracts.
It is the first time that it is implemented as a prototype with a working code.
“We built this as a standalone feature of our lightning network software. We chose data what we thought would be cool, U.S. dollars, but it could be any data you want, whether weather or a stock.”
He further expressed that the demo is still “experimental” and “shouldn’t be used for real money.” However, he his convinced that bitcoin will one day scale as its early users envisioned with the use of the lightning network.
MIT researchers have already built an implementation of the lightning network.
“We at DCI, we really believe in the lightning network,” Dragos mentioned. “Bitcoin doesn’t scale very well. I decided there has to be something better. Turns out what’s better is lightning. It’s the way to scale.”
Usually, smart contracts are associated with ethereum and they are not with bitcoin. However, Dragos explains that bitcoin and ethereum can do the same thing with a little bit of work.
“When folks think smart contracts, they think ethereum. Their scripting language is much richer. It’s not as developer friendly because bitcoin didn’t go in that direction, but you can use it. You have to be a little creative.”
Even if the demo is finished, Dragos and Dryja still have some questions and “quandaries”.
“From the individual oracle’s perspective, they’re going to want to make some money. We’re going to have to understand that,” Dragos mentioned.
The MIT group is currently working with “big companies” partner of the DCI “that might implement this.”
However, MIT DCI have done their job in showing how the underlying technology of cryptocurrency works and it is now to the cryptocurrency space to decide if oracle data is worth the use or not.
“It’s a hard guess. It could be a significant deal if people use it. But we don’t know what people are going to be using it for. New technologies are available all the time, that doesn’t mean they end up making it though.”