Research regarding the development of a Central Bank Digital Currency (CBDC) in the United States has discovered that distributed ledger architecture has “drawbacks.”
On February 3, the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology’s Digital Currency Initiative revealed the results of their preliminary research on a CBDC. The study, nicknamed “Project Hamilton,” used two different models to test a “hypothetical general purpose CBDC.”
The first arranged the validated transactions into blocks to produce an ordered transaction history using “ordering server” distributed ledger technology (DLT). The researchers were able to process over 99 percent of transactions in under two seconds, and the bulk of transactions in under 0.7 seconds, using this design.
Despite the use of blockchain technology, they emphasised that a “distributed ledger functioning under the sovereignty of diverse entities was not required.” To avoid double spending, the second design processed transactions in parallel on numerous computers, rather than relying on a single ordering server. Although “this leads to greater scalability,” the researchers noted that it did not “materialise an ordered history for all transactions.”
It’s a wrap for this story. Have a productive day, reader.
