BitMex awards its last developer grant to a Bitcoin scalability solution from MIT

Published at: Aug. 24, 2020

BitMex's 100x Group has awarded its last Bitcoin development grant of the year. The company has awarded a grant valued at $40,000 to Calvin Kim for his Bitcoin scalability solution, Utreexo — a project originally created by Tadge Dryja from the MIT Digital Currency Initiative.

Bitcoin's protocol checks every proposed transaction to make sure that the sender has enough coins to complete the request. All unspent Bitcoin (BTC) is saved in what is known as UTXO, or Unspent Transaction Outputs. While the entire Bitcoin blockchain is currently around 300 GB, the UTXO is only 4 GB. MIT researchers have claimed that as the network grows, this may one day present a bottleneck of its own.

With Utreexo, the person holding the funds specified in a particular transaction maintains the full UTXO data themself, proving that the funds exist. When they want to spend coins from their wallet, they present proof of their validity in the form of a hash, which takes up a lot less space than the original data. This, in turn, makes the protocol more scalable without sacrificing security, according to the project's researchers.

This solution is reminiscent of the "fast catch up" concept recently proposed by Algorand. It is worth noting, however, that Bitcoin purists tend to be skeptical of any scalability solutions that seek to replace full nodes with hashes or zero-knowledge proofs. 

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