We’re excited to share with you information about our new hire, Tadge Dryja, and his leading work exploring solutions for scaling blockchain networks. Tadge, a co-author of the Lightning Network paper and the former CTO of Lightning Labs, recently joined the DCI as an open-source developer and research scientist. Tadge is working with students and other researchers at MIT on implementing and deploying usable software for the Lightning Network, and is helping others understand how this technology can be extended to enable efficient payments throughout the internet.
Tadge’s appointment is line with the DCI’s commitment to foster the development of robust, extensible software infrastructure for cryptocurrencies and related applications. We view the Lightning Network’s “off-chain” payments channel model as one of the most promising proposals for addressing the pressing issue of blockchain scalability. But it is still unclear how this technology will be adopted in practice and, as it evolves, what the right design trade-offs will be. We are working with a dedicated, global community to investigate this.
As it is currently designed the Bitcoin network, due to its parameters, limits the throughput at which transactions can be processed. More fundamentally, since each node in the network must validate and store every transaction, adding more servers doesn’t increase the amount or speed of transaction processing. And even when their transactions are processed, users typically must wait an hour to ensure that they will not be reorganized off the blockchain and potentially rendered invalid.
And Possible Solution….
The insight behind the Lightning Network is that not all transactions need to be broadcast to the entire network. Much as people routinely enter into legal contracts but rarely go to court, many payments can securely occur offline, with disagreements resolved by the blockchain. When people want to repeatedly transact, their transactions can be initially funded via the Bitcoin blockchain in the form of a payment channel, but then can occur off-chain, or peer-to-peer, by exchanging receipts. If one party tries to defraud the other, the latter can publish their last received receipt to the Bitcoin blockchain and safely recover funds from the payment channel. Once a payment channel is established, the participants can make Bitcoin payments instantly without relying on the mediation of a trusted third party, up to the limits of the payment channel and until it is closed.
Establishing peer-to-peer payments opens up whole new transaction models that were previously untenable. For example, the Lightning Network could allow payments worth fractions of a cent. In existing cryptocurrencies, these micropayments aren’t feasible because of the prohibitively high fees that result from thousands of computers storing and validating every transaction. Lightning could also let customers create channels with cryptocurrency exchanges, eliminating counterparty risk, a recurring problem in the Bitcoin ecosystem. Moreover, exchanges can create channels with each other, and quickly move funds without having to compromise their business by revealing their payments on a public blockchain. The Lightning Network could even provide a trustless way for making exchanges between different blockchains and asset types, such as trading Zcash for Bitcoin, which would be possible on any blockchains that support a small set of common features.
Tadge studied computer engineering at Carnegie Mellon University and holds an MFA in photography from the School of Visual Arts. He taught at Mie University before discovering and working on Bitcoin and digital currencies. Before co-founding Lightning Labs, he was CTO of Mirror, a Bitcoin smart contract startup based in San Francisco, where he led exploration of the limitations and possibilities of new decentralized financial systems.