A group of leading U.S. universities, including the Massachusetts Institute of Technology (MIT), Stanford University, Carnegie Mellon University, and the University of California, Berkeley are developing a blockchain payment network to address some of the most critical challenges facing cross-border payments.
The digital currency system, called Unit-e, is designed to solve security, performance and scalability problems of cross-border financial transactions. The project is funded by Swiss-based non-profit foundation Distributed Technology Research (DTR) and the system is expected to be rolled out later this year.
Unit-e blockchain payment network
Blockchain offers the possibility of a secure and dynamic distributed database that updates as cryptocurrency is exchanged among participants. This makes it easier and quicker to make and accept payments, a factor that is critical to scale cross border payments and international trades.
When launched, Unit-e payment solution will be able to process 5,000 to 10,000 transactions per second (TPS). This would surpass even VisaNet financial network which currently scales at 1,700 TPS on average. By comparison, Bitcoin’s current throughput is somewhere between 3.3 and 7 TPS while Ethereum processing capacity can handle between 10 and 30 TPS. This makes Unit-e highly scalable and capable of being applied in a broad range of enterprise transactions involving cross-border payments.
Additionally, an academic paper published by DTR states that Unit-e cryptocurrency aims to achieve transaction confirmation times of 15 seconds for on-chain transactions, and just 2 to 4 seconds for off-chain transactions.
The DTR team has written and published 10 research papers and has described a decentralized payment system as the “killer app” for blockchain, comparing it to what TCP/IP is for the Internet.
Joey Krug, a member of DTR Foundation Council said:
“A lack of scalability is holding back cryptocurrency adoption, and DTR groundbreaking research is addressing this. The Unit-e developers are turning this research into real scalable performance which will benefit a huge swath of decentralized financial applications”
Solving blockchain scalability problem
One of the main limitations hindering blockchain from reaching commercial capability is scalability issue. Existing blockchain solutions are struggling to scale seamlessly due to large data size, slow response time, and high transaction costs. As more users join the blockchain networks and the size of the transaction data increases, current blockchain applications are beginning to strain under their own weight.
There are many projects currently making interesting stabs at the scalability problem but only a few have made notable progress so far. Two promising solutions to the scalability issue are sidechain and sharding. It remains to be seen whether Unit-e will achieve in this critical area where others have failed before.