LONDON — Research labs focusing on blockchain technology are being opened up at the University of Edinburgh and the Tokyo Institute of Technology, sponsored by one of the cofounders of cryptocurrency Ethereum.
IOHK, a Hong Kong-based cryptocurrency research and development company, is investing up to $US1 million in the two facilities, according to the business’ cofounder Charles Hoskinson. Hoskinson was one of the founders of Ethereum, a popular digital currency set up in 2013.
Blockchain has become one of the hottest areas of technology among banks and financial institutions over the last few years.
First developed to underpin digital currency bitcoin, the distributed ledger technology is basically a form of shared database that allows institutions to interact directly with each other rather than through middlemen. The technology could save banks billions in fees, according to estimates.
However, bitcoin itself was only invented in 2009 and blockchain technology is still very new. Hoskinson told BI:
“Early on when we started the company [IOHK], originally we were just going to be an engineering consultancy firm — kind of like a boring, standard software shop. But we realised that our technology was very young and the science of the technology wasn’t settled. As a consequence, we felt like we would be building on quicksand unless we brought in some expertise early on.
“After having discussions, they [the experts] said, actually we don’t have answers to a lot of these fundamental questions. We said, how do we get those answers? and they said, we need to write some papers, we need to do some basic research. Over time we started moving into the university research space.”
The two labs will focus on topics such as cryptography, smart contracts, and how to upgrade cryptocurrency systems. They will have up to 15 people working on the issues, with IOHK providing staff on the ground at each facility to help with research.
Hoskinson said: “This is commonly not done in the startup setting. Usually, this is something you do if you’re a company like Microsoft — Microsoft has research campuses at many major universities.”
The Edinburgh lab will be led by Professor Aggelos Kiayias, Chair in Cyber Security and Privacy at the University of Edinburgh and Chief Scientist at IOHK.
Professor Kiayias says in a statement: “Distributed ledgers is an upcoming disruptive technology that can scale information services to a global level. The academic and industry connection forged by this collaboration puts the Blockchain Technology Lab at Edinburgh at the forefront of innovation in blockchain systems.”
All the research from the lab will be open source, meaning anyone can have access to it and patents will not be awarded. IOHK has committed to funding the Edinburgh and Tokyo facilities for two years but Hoskinson hopes to expand the project to more universities around the world.
IOHK, set up in 2015 by Hoskinson and Jeremy Wood, builds cryptocurrencies and blockchains for academic institutions, government entities, and corporations. Hoskinson said the company has several clients in Asia, but declined to name specific ones saying that a project would be announced in March. IOHK has around 50 staff.
The company is privately funded and profitable, according to Hoskinson. “We’re making lots of money and we’re doing quite well,” he said.
“We get contracts to build cryptocurrencies and we take fiat currency — dollars, yen, whatever — and also take ownership of some of the cryptocurrencies we build. It’s a surprisingly good business model.”
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