MIT’s Digital Currency Initiative — A Research-Driven Approach to Blockchain
When the Bitcoin Foundation fell apart and funding for Bitcoin core development was needed, the MIT founded the Digital Currency Initiative to step in. In the years since, the DCI has evolved into a vibrant center of cutting edge research on some of the most difficult challenges around blockchain technology. DCI Director Neha Narula joined us on Epicenter to discuss the DCI’s position between academia and industry, and their most fascinating research topics.
During her PhD in Distributed Systems and Databases, Neha Narula became interested in how to effectively scale systems. Soon after, the challenges of scaling Bitcoin — largest consensus algorithm in the world — immediately piqued her interest. Currently, as the Director of MIT’s Digital Currency Initiative Neha oversees the operations of this research organization bringing together the brightest minds at MIT to conduct research necessary to support the development of digital currency and blockchain technology. The interdisciplinary team of DCI researchers aims to identify and address the obstacles on the way to making the “Internet of Value” vision a reality. “Cryptocurrencies and blockchain technologies are so much more than just computer science. It’s distributed systems, it’s cryptography, it’s networking but it’s also regulation, and game theory, market design, finance, law.. so many different areas that need to come together”, says Neha. One of the goals of DCI is to help them find a common language.
Among the variety of research topics examined by the DCI, which include the obvious challenges of scalability and privacy, what’s particularly interesting is the ability to work directly with central banks —the ECB, Bank of Canada, Monetary Authority of Singapore, among others — and through that, make an effort to bridge the gap in understanding between crypto technologists and policymakers. “Central bankers are very skeptical about cryptocurrencies potential to replace fiat currencies due to their challenges: scalability, privacy and energy consumption”, says Neha. “They are focused on maintaining financial stability and are coming from a position of extreme conservatism. But of course, they start paying attention to the space because cryptocurrencies are a new form of money that people do use.”
One of the fundamental challenges facing the space is the tension between privacy and willingness to drive the system fast forward. In an effort to explore and address the privacy issue, Neha co-authored a paper presenting zkLedger, the first system to protect ledger participants’ privacy and provide fast, provably correct auditing. “It’s a system designed on top of the zero knowledge proof. The idea is that you can get aggregate answers about the system without revealing individual transactions, so you never have to open up individual transactions”, explains Neha.
Looking forward, Neha hopes that the DCI will continue on its mission of setting foundations for this new field of study and creating a shared vocabulary. As part of the MIT mission is its service to the public good, she wants to make sure that the DCI will set the standards for incorporating the issue of ethics, access, addressing inequality and setting appropriate standards for the space.
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