100x Group is delighted to announce that it has awarded a US$40,000 one-year grant to Utreexo researcher and developer Calvin Kim. Calvin has been working on Utreexo for over a year and was instrumental in the development of the first demonstration release, which was finally announced in July this year.
What is Utreexo and why is it important?
In Bitcoin, user balances are stored as a collection of “Unspent transaction outputs,” or “UTXOs”. It is important to distinguish between the full transaction history, the full blockchain which is around 300 GB in size and the set of spendable coins, the UTXO set which is around 4GB. Nodes can prune the full blockchain, however they are required to retain the full UTXO set, to validate new transactions and spend coins. Therefore the UTXO size may be a major scalability bottleneck in the future.
Utreexo is a hash based accumulator, which allows unspent outputs to be compressed into a smaller size. There is no loss of security; instead, the burden of keeping track of funds is shifted to the owner of those funds. With Utreexo, the holder of funds maintains a proof that the funds exist, and provides that proof when spending the coins. These proofs can be compact (under 1KB) but do represent a significant disadvantage of the Utreexo model. Utreexo provides a long-term scalability solution, as the size of the proof grows very slowly with increasing size of the underlying transaction set.
Commenting on the grant, Tadge Dryja from MIT DCI, who is credited with inventing Utreexo, said the following:
It’s great that 100x is not only funding Bitcoin research and development, but also providing support for newcomers to the Bitcoin open source ecosystem. We at the DCI are looking forward to working with Calvin on improving Bitcoin’s scalability & security, and making Bitcoin the best digital currency we canTadge Dryja (MIT DCI)
This marks the end of a series of US$615,000 of 100x Bitcoin developer grant commitments announced in 2020. The program will open again in the summer of 2021.