In collaboration with a team at the Federal Reserve Bank of Boston, MIT experts have begun designing and testing technical research through which further examination of a Central Bank Digital Currency (CBDC) can be performed in the U.S. The effort, known as Project Hamilton, is in an exploratory phase, and the research is not intended as a pilot or for public deployment. Instead, the researchers have explored two different approaches that could be used to process transactions, and thus could indicate the technical feasibility of a potential CBDC model. In a process involving significant design flexibility, the MIT group tested factors such as the volume and speed of transactions, and the resilience of the systems in general, among other requirements for a viable digital currency. The Project Hamilton research collaboration between MIT and the Boston Fed began in August 2020, as an initiative to examine a hypothetical CBDC model. The work conducted so far represents phase one of the project, an evaluation of the fundamentals of transaction processing.
"The core of what we built is a high-speed transaction processor for a centralized digital currency, to demonstrate the throughput, latency, and resilience of a system that could support a payment economy at the scale of the United States," says Neha Narula, director of MIT's Digital Currency Initiative and a research scientist at the MIT Media Lab, who led the effort with the Boston Fed. "It is important to note that this project is not a comment on whether or not the U.S. should issue a CBDC—but work like this is vital to help determine the answer to that question. This project serves as a platform for creating and comparing more viable designs, and provides a place to experiment and collaborate on more advanced digital currency functionality."
The researchers developed two complete sets of computing source code, or "codebases," for the software systems. One codebase was capable of handling 1.7 million transactions per second, with 99 percent of those transactions finishing in less than a second—well above the basic benchmark of 100,000 transactions per second they sought to achieve. The other codebase was able to process about 170,000 transactions per second. That level of throughput would help finalize every transaction at a central bank, while enabling the growth of other machine-to-machine transactions—both of which would be vital to a potential CBDC. Those findings have been released in a paper titled, "A High Performance Payment Processing System Designed for Central Bank Digital Currencies," released by MIT and the Federal Reserve Bank of Boston. The Project Hamilton software, called OpenCBDC, has been released under an MIT open-source license as well. It is one piece of work among others being done on CBDC issues in the Federal Reserve system.
In each of the two digital currency designs the MIT and Boston Fed teams tested, users interact with a centrally administered transaction processor, using digital wallets with individual, cryptographic signatures that authorize the movement of funds. One ledger, which keeps a complete record of transactions in the order they were processed, turned out to be the slower of the two systems. The researchers also note that the faster system, the one processing 1.7 million transactions per second, the transaction quantity "appears to scale linearly with the addition of more servers, which would sustain an even larger volume of activity. The team was aware that consumer privacy would likely be an essential consideration in the design of a working U.S. digital currency, and they designed relatively streamlined systems with that issue in mind. The question of system resilience is also critical to any CBDC. In this case, modeling by the Project Hamilton researchers showed that if two large regions of the U.S. lost connectivity, the digital currency system could continue to operate elsewhere and would not suffer any data loss or system disruption. Officials with the Boston Fed say the work represents an important step in evaluating the potential of a CBDC.
The technical research can support different CBDC approaches, including direct-to-consumer models, while the government would likely have to determine whether financial institutions would play a role as well. And, as pointed out in testimony last June before the U.S. House of Representatives Committee on Financial Services, about 36 percent of people in the U.S. who do not have bank accounts also do not own smartphones. In this and other areas, policy decisions and technology design are overlapping matters. Releasing the Project Hamilton software under its open-source license could help people collaborate further on CBDC research. The researchers involved in Project Hamilton are now pursuing another phase of their research, in which they will analyze additional types of functionality related to a hypothetical digital currency. These could potentially include the tools needed for both privacy and compliance, matters relating to smart contracts and numerous other specified uses, auditability, and more.
https://techxplore.com/news/2022-02-experts-technical-hypothetical-central-bank.html
"The core of what we built is a high-speed transaction processor for a centralized digital currency, to demonstrate the throughput, latency, and resilience of a system that could support a payment economy at the scale of the United States," says Neha Narula, director of MIT's Digital Currency Initiative and a research scientist at the MIT Media Lab, who led the effort with the Boston Fed. "It is important to note that this project is not a comment on whether or not the U.S. should issue a CBDC—but work like this is vital to help determine the answer to that question. This project serves as a platform for creating and comparing more viable designs, and provides a place to experiment and collaborate on more advanced digital currency functionality."
The researchers developed two complete sets of computing source code, or "codebases," for the software systems. One codebase was capable of handling 1.7 million transactions per second, with 99 percent of those transactions finishing in less than a second—well above the basic benchmark of 100,000 transactions per second they sought to achieve. The other codebase was able to process about 170,000 transactions per second. That level of throughput would help finalize every transaction at a central bank, while enabling the growth of other machine-to-machine transactions—both of which would be vital to a potential CBDC. Those findings have been released in a paper titled, "A High Performance Payment Processing System Designed for Central Bank Digital Currencies," released by MIT and the Federal Reserve Bank of Boston. The Project Hamilton software, called OpenCBDC, has been released under an MIT open-source license as well. It is one piece of work among others being done on CBDC issues in the Federal Reserve system.
In each of the two digital currency designs the MIT and Boston Fed teams tested, users interact with a centrally administered transaction processor, using digital wallets with individual, cryptographic signatures that authorize the movement of funds. One ledger, which keeps a complete record of transactions in the order they were processed, turned out to be the slower of the two systems. The researchers also note that the faster system, the one processing 1.7 million transactions per second, the transaction quantity "appears to scale linearly with the addition of more servers, which would sustain an even larger volume of activity. The team was aware that consumer privacy would likely be an essential consideration in the design of a working U.S. digital currency, and they designed relatively streamlined systems with that issue in mind. The question of system resilience is also critical to any CBDC. In this case, modeling by the Project Hamilton researchers showed that if two large regions of the U.S. lost connectivity, the digital currency system could continue to operate elsewhere and would not suffer any data loss or system disruption. Officials with the Boston Fed say the work represents an important step in evaluating the potential of a CBDC.
The technical research can support different CBDC approaches, including direct-to-consumer models, while the government would likely have to determine whether financial institutions would play a role as well. And, as pointed out in testimony last June before the U.S. House of Representatives Committee on Financial Services, about 36 percent of people in the U.S. who do not have bank accounts also do not own smartphones. In this and other areas, policy decisions and technology design are overlapping matters. Releasing the Project Hamilton software under its open-source license could help people collaborate further on CBDC research. The researchers involved in Project Hamilton are now pursuing another phase of their research, in which they will analyze additional types of functionality related to a hypothetical digital currency. These could potentially include the tools needed for both privacy and compliance, matters relating to smart contracts and numerous other specified uses, auditability, and more.
https://techxplore.com/news/2022-02-experts-technical-hypothetical-central-bank.html
No comments :
Post a Comment