In a new article, MIT’s Beth Israel Deaconess Medical Center researchers have created a test device that can be attached to the end of a conventional bitcoin ATM to test the cryptographic properties of the digital currency.
The test rig can store digital signatures of the bitcoin transaction that can verify its validity.
If the transaction is a valid one, the test rig will receive a bitcoin payment from the bitcoin network and it will be issued to the person who sent it.
If not, it will revert back to the sender and receive the next bitcoin payment.
“Bitcoin can be used to facilitate transactions that are private and anonymous,” the researchers wrote.
“These new digital signatures are useful to validate the integrity of a transaction.”
In the future, these signatures could be added to the bitcoin blockchain, a public record that anyone can access.
The researchers believe that these digital signatures can help prevent double-spending, which is a common problem in the bitcoin ecosystem.
Bitcoin transactions can be made through a peer-to-peer network where participants transfer money between each other anonymously.
However, bitcoin transactions are not necessarily public, and if a malicious actor is able to use the bitcoin payment to steal funds, the resulting loss could be enormous.
The new test rig, which measures in size of about 3 centimeters and weighs about 1.5 kilograms, can hold about a million bitcoins, the researchers said.
“The system will have enough power to store and verify 1,000 bitcoins,” said study co-author Andrew Lee, an assistant professor of mechanical engineering.
“This is enough for one day’s transaction, or one day worth of transactions, and could be enough for an entire month’s transaction.”
The bitcoin payment will be stored in the test device.
If a malicious party attempts to use bitcoin to make an unauthorized payment, the system will automatically revert back.
The team is currently testing the system with a single transaction using a different bitcoin payment and has yet to validate its cryptographic properties, the paper said.
For now, the bitcoin-testing rig is only intended to be used with digital signatures, which require the test apparatus to be attached, not the blockchain, Lee said.
But he said that the system could be used for other purposes as well.
“There are other ways to validate digital signatures that are not only digital signatures but also other things like signatures that verify ownership, or signatures that validate transactions that aren’t necessarily public,” Lee said in an interview.
The device is also designed to operate with low-power consumption.
Lee said that it can be assembled with a standard electronic circuit, and the researchers plan to release a software library that will allow other organizations to make their own bitcoin-test rigs.
The project is supported by the MIT Computational Science and Artificial Intelligence Laboratory, the Defense Advanced Research Projects Agency and the National Science Foundation. _____