Academic Research Into Crypto Picks Up, But Universities Remain Hesitant to Fund

Despite recent advances in academic research into the blockchain for everything from central bank digital currencies to pacemakers, universities and governments lag in their willingness to fund basic research in the sector.

While researchers are getting creative when presenting their work to traditional institutions, the situation is holding up research.

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Recent pre-print research on Bitcoin’s Lightning Network drew wide attention in the crypto sphere, largely thanks to its underlying allegation that the network is a way of centralizing the network. As attractive as such a controversial study is, it is not alone. Research into crypto topics has been expanding.

One deeply involved party is Andrea Baronchelli. A blockchain researcher at City University of London and the Turing Institute, Baronchelli is co-author of several papers on crypto markets and one pre-print on dark web marketplaces.

“You are absolutely right, there aren't many groups doing research on cryptos — yet,” Baronchelli told Cointelegraph optimistically. “Many academics still do not understand what cryptos are, and have not yet realised what an incredible resource of open data they offer.”

Marek Laskowski, a senior blockchain advisor at Novera Capital and author of another recent pre-print on decision making in blockchain systems, commented on the importance of independent work in the field. Speaking to Cointelegraph, he said that “Basic empirical research [...] is done by passionate researchers who do this sort of work in their spare time.” Such a perspective makes sense, given that Laskowski himself is not backed by a university.

Running into limits on funding for research

According to Laskowski, government funds for research in general “seem to be drying up.” The problem goes beyond blockchain research, but as an issue it hits crypto particularly hard given its unique history:

“Generally speaking, research budgets have been experiencing cuts in public institutions for some time now. This combined with the fact that blockchain did not have its origins in academia often makes it hard to contextualize for grant review committees.”

Complicating this situation is increasing engagement from certain major universities with blockchain. Stanford recently backed an alumni-founded startup looking to provide blockchain developer tools. In 2018, Ripple made headlines by donating $50 million to a roster of universities to up their blockchain education.

Carnegie Mellon University, which houses one of the top computer science programs in the U.S., has an entire program dedicated to blockchain. At the beginning of the year, received a $4 million donation from an alumnus and Maker contributor dedicated to DeFi education. Yet their actual spending on academic research in the area remains unclear, and Carnegie Mellon’s press team declined to comment for this piece.

“Academic work on crypto is not particularly well funded as a sector,” Michael Zargham, a visiting crypto-economics researcher at the Vienna University of Economics and Business told Cointelegraph. “I don’t see a sustainable source of funds for crypto space specific research.”

Zargham would know, given that he also runs his own research firm, BlockScience, which focuses on artificial intelligence and blockchain.

Project-oriented funds are more readily available

It would be unfair to say that institutions had neglected funding into blockchain as a whole, including research spending. The issue is that current funding models don’t treat blockchain as a subject for research so much as a tool to be made to spec. The largest spenders are looking to solve specific problems.

“At Vienna University we’ve gotten some project-based research projects from the City of Vienna and from Telecoms,” Zargham said. “But this is more project oriented and less academic in nature.”

On a bigger scale, the U.S. Department of Defense, is a major source of research funding in a wide range of fields and has spent a lot of money on developing blockchain. These grants have similarly gone toward specific solutions for defined problems rather than basic research.

Laskowski of Novera Capital noticed a similar trend in how the private sector funds research in the sphere:

“Generally speaking, [funding is] increasing from private sources. Most often through projects looking to get research around specific aspects of their projects done. Sometimes it's distributed by entities like the Ethereum Foundation, gitcoin etc.”

The problem of publishing

In an email to Cointelegraph, Baronchelli noted that crypto research is somewhat relegated to its niche. He said, “the community being small, your work gets (initially, I hope) less attention/funding than some other topic would get.”

Attention and exposure are critical raw materials for researchers pleading their cases before institutional funding.

Consequently, linked to insufficient funding for basic blockchain research is the problem of getting that research published. Pre-print servers, which house much of the research mentioned above, are great for scientists looking to lay claim to a topic before competitors. As they are not peer-reviewed, however, research papers in pre-print remain in limbo, largely uncitable in central scientific discourse.

Searches for crypto-linked keywords through the archives of juggernauts like Nature and Science turn up only a host of opinions and news pieces — no research as research.

Even their less selective open-access sister journals Nature Communications and Science Advances (where this reporter used to work) face this issue. Nature’s subsidiary Scientific Reports has put out some research on the subject, but Scientific Reports is substantially less picky about qualifications like impact. Like the similarly modelled PLOS ONE, Scientific Reports measures its annual output in the tens of thousands, as compared to

The more selective journals in these families typically have their first pick of research, with rejected papers often transferring to journals lower on the totem pole within the same organizations when editors think they meet standards of scientific rigor but not general interest or significance.

What that means for crypto and blockchain research is a cap on exposure in top-tier multidisciplinary journals — a lack of faith from publishers that translates into a death knell when courting institutional money, which is notorious for its obsessive counting of citations and impact factors and h-indices.

Researchers adapt, using cross-disciplinary appeal to present blockchain

One of blockchain’s advantages is its flexibility as a field and its applications, meaning that the range of research grants a lab focusing on the subject can apply to is theoretically wide. As Zargham said:

“The actual academic research comes from basic fields. In addition to computer science, one can work on formal methods category theory, control theory and robotics.  In particular crypto systems meet the foundational definitions of cyberphysical systems which is a rapidly growing and well funded segment of the engineering academia.”

Zargham indicated an example in a recent application from his team for a grant backed by the Austrian central bank. The grant itself highlights the prospect of a central bank digital currency, while the applicants received informal unwritten interest in use of blockchain for the project.

It is via other, better-funded disciplines and independent interest that blockchain research has seen its funding up to now. For the time being, the field seems set to remain dependent on the resourcefulness of researchers and their hopes for the future.