BitMex 100x Group awarded its last Bitcoin development grant of the year. The company awarded Calvin Kim a $ 40,000 grant to solve Bitcoin Utreexo’s scalability – a project originally built by Tadge Dryja of the MIT Digital Currency Initiative.

The Bitcoin protocol reviews each proposed transaction to ensure the sender has enough coins to complete the request. All unspent Bitcoin (BTC) is stored in so-called UTXO, or unspent transaction output. While the entire Bitcoin blockchain is currently around 300GB, UTXO is only 4GB in size. MIT researchers have claimed that this could one day become its own bottleneck as the network grows.

In Utreexo, the person who owns the funds identified in a particular transaction maintains the complete UTXO data themselves and proves that the funds exist. When they want to spend coins from their wallet, they provide proof of their viability in hash form, which takes up much less space than the original data. This, in turn, makes the protocol more scalable without compromising security, according to the project’s researchers.

This solution is reminiscent of the recently proposed “catch-up speed” concept by Algorand. It’s worth noting, however, that Bitcoin proponents are skeptical of scalability solutions that attempt to replace entire nodes with hash tags or clues devoid of knowledge.

Source: CoinTelegraph