MIT Is Testing A Smart Contract-Powered Bitcoin Lightning Network

An MIT test is providing a rare glimpse of how bitcoin might truly work at scale.

Revealed to CoinDesk last week, the prestigious U.S. university has been quietly demoing an experimental use case for bitcoin's lightning network, one that showcases how it might be combined with smart contracts to not only handle millions of transactions, but do so with a greater degree of complexity.

For this demo, researchers Tadge Dryja and Alin S. Dragos built a test oracle to broadcast the recent price of U.S. dollars in satoshis, the smallest unit of bitcoins, which anyone can grab and use for their smart contracts.

"We built this as a standalone feature of our lightning network software. We chose data what we thought would be cool, U.S. dollars, but it could be any data you want, whether weather or a stock."

Dragos stressed that the demo is "Experimental" and "Shouldn't be used for real money." That said, he and other MIT researchers are convinced that with the help of the lightning network, bitcoin might one day scale to capacities originally envisioned by its early users.

As part of that work, MIT researchers have already created an implementation for the lightning network called lit, and this oracle code is an add-on of that work.

"We at DCI, we really believe in the lightning network," Dragos said.

While lightning provides scale, smart contracts add other new functionality to bitcoin.

It's a kind of advanced smart contract use case that is usually not associated with bitcoin.

"It's not as developer friendly because bitcoin didn't go in that direction, but you can use it. You have to be a little creative," Dragos said.