A report from the MIT Technological Review has revealed a new type of cryptocurrency that is being developed on behalf of the Bank of England.
Two researchers from UCL, Sarah Meiklejohn and George Danezis, have designed the RSCoin: a digital currency that would use a private blockchain under the control of the Bank of England. Although it is being developed for the central bank of England, other central banks could use the same technology for their own means, providing an increase in efficiency and security that is the hallmark of blockchain technology.
By utilizing a private blockchain, of which the bank would have control, RSCoin would allow the bank to carry out financial interventions in order to artificially regulate the economy, something which the decentralized nature of public blockchains like the bitcoin blockchain prohibits. The intent behind this is to combine the benefits of using a cryptocurrency whilst keeping the control of the currency with a central authority. Despite the bank retaining control, external organizations, possibly other banks, could be used to process transactions before submitting them to the central ledger.
It is hoped that the control of the central bank would lead to greater trust placed in cryptocurrency from the general population. So far, RSCoin has been tested using 30 different computers inside Amazon’s cloud computing platform. More information on the system can be found in the paper on RSCoin that was presented last month.
