England’s central bank has inspired the development a cryptocurrency. Dubbed RSCoin, it will operate on blockchain technology similar to the digital ecosystem that powers the much-maligned digital currency Bitcoin. Originally motivated by the Bank of England’s digital currency agenda, the University College of London announced the creation of the new cryptocurrency at the Network and Distributed System Security Symposium (NDSS) in San Diego. If RSCoin moves forward, the implications of a central-bank-controlled digital currency may usher in a new era of innovation and creativity in the financial services sector. It may also mean that we no longer carry wallets.
In a research report released last year, the Bank of England posited that “while existing private digital currencies have economic flaws which make them volatile, the distributed ledger technology that their payment systems rely on may have considerable promise.” And just month in a speech given at the London School of Economics, Ben Broadbent, the Bank of England’s Deputy Governor, said that the distributed ledger technology encompassed in the blockchain “goes right to the heart of what central banks do.”
According to Bitcoin.org , “All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.” Simply put, the blockchain is a shared public ledger. That is, all transactions on the network are public and visible to everyone, but they shared in such a way that limits counterfeiting and bolsters the integrity of the system.
Dr. George Danezis, one of the researchers working on RSCoin, argues that the use of digital currencies by businesses is a matter of staying solvent. “Whoever reacts too slowly to these […]
