National Science Foundation Awards $450k for Cryptocurrency Incentive Study

A Princeton University researcher has received more than $400,000 in federal funding to study mechanism incentives and their applications to cryptocurrencies like bitcoin.

The study project, "Duality-based tools for simple vs. optimal mechanism design and applications to cryptocurrency", is being led by Seth Weinberg, an assistant professor of computer science at Princeton. The grant, worth $450,000, was awarded on 28th June by the National Science Foundation. The project is set to begin in September and will last until August 31, 2020, according to the NSF.

As the organization's website explains:

"A secondary focus of this project is to apply these theoretical foundations to resolve cryptocurrency incentive issues arising within Bitcoin, an emerging cryptocurrency. While bitcoin has remained largely immune to traditional security breaches, numerous incentive issues have been discovered which could undermine its future security if not properly addressed."

Though cryptocurrencies constitute only part of the research study – its primary focus is the design of algorithmic mechanisms and the theoretical incentives at play – its the latest instance of a project that involves the tech receiving federal backing.

In mid-2015, the NSF awarded $3m to the Initiative for Cryptocurrency and Contracts (IC3), a research effort involving academics from Cornell, the University of Maryland and the University of California Berkeley. The NSF has also moved to back cybersecurity-related research that involves blockchain.