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A green digital currency built on trust

From their colossal carbon footprint to their expensive and complex application, cryptocurrencies like bitcoin are marred by numerous problems. The EU-funded AT2 project is taking a new, minimalist approach to decentralised payments. The result is a new class of blockchain algorithms that could offer citizens a cleaner, simpler payment system.

©memorystockphoto #434151148, source: 2022

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Bitcoin has a problem. Not only is the popular cryptocurrency dogged by astronomical electricity consumption and a huge carbon footprint, it is also frustratingly complex – not to mention expensive.

“Bitcoin was essentially built on a foundation of distrust, where everyone is viewed as a cheater until proven otherwise,” explains Rachid Guerraoui, a researcher at the Swiss Federal Institute of Technology Lausanne. “It uses a consensus algorithm that requires users to prove their honesty by executing complex, expensive and energy-intensive computing tasks that are then verified by other players.”

Through the EU-funded AT2 project, supported by the European Research Council, Guerraoui and his colleagues aim to flip this approach to decentralised payments on its head. “We take a minimalist approach where players don’t need to reach a consensus, they just need to prevent malicious behaviour whenever it manifests itself,” says Guerraoui. “In other words, we assume everyone is honest, and if a player sees someone trying to do something wrong, they ignore that player – and only that player.”

Communication over consensus

The result of this work is a new class of blockchain algorithms for resolving asset transfers. “Instead of using a consensus model, the AT2 approach uses communication,” explains Guerraoui.

For example, if a malicious player wants to make a payment, the system prevents anyone from accepting money until a randomly chosen sample confirms that the player has not sent money to anyone else. If they have, the payment will not be accepted. “Basically, we’re saying that you only need to exchange information with a small sample, and not a consensus, to successfully implement a cryptocurrency,” notes Guerraoui.

By removing bitcoin’s consensus requirement, the project has achieved safe cryptocurrency transactions on a large scale and with very little energy spent. In fact, according to Guerraoui, the AT2 system’s energy cost is roughly equivalent to that of sending an email. Furthermore, it only produces a few grams of CO2, which is miniscule compared to the estimated 300 kg of CO2 produced for every bitcoin transaction.

“This gives us a significant advantage over bitcoin, which I’ve been told uses as much electricity as the entire country of Austria and has a global carbon footprint comparable to that of Denmark,” adds Guerraoui.

Scaling towards bitcoin

Researchers are currently working to bring their innovative payment solution to scale. “Our goal is to scale up to a very large number of users, similar to what bitcoin has, but to do so in a much more energy-efficient and cost-effective manner,” he says.

Guerraoui goes on to note that designing the payment system proved to be much easier than his team initially expected. “This was a nice surprise, and one that has allowed us to quickly translate our theory into a solution that can handle millions of cryptocurrency transactions every second,” he concludes.

AT2 has released its system as an open-source code, which is now available for anyone to download and use.

The project has also attracted considerable attention, from both the media and investors. Building on this momentum, Guerraoui and his team are looking to establish a non-profit organisation from which they can make their system available for use beyond the cryptocurrency realm.

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€ 0
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€ 150 000
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