Researchers at the United States Federal Reserve and the Massachusetts Institute of Technology (MIT) Project Hamilton He is collaborating on a central bank digital currency (CBDC) initiative and is working on a new “digital dollar” project.
Project Hamilton has now announced that it is testing a digital dollar that the Fed claims can process 1,700,000 transactions per second.
According to the whitepaper of the project:
“Our primary goal (in the project) is to design a core processing unit that meets the robust requirements for speed, efficiency and fault tolerance that are the foundation of a large retail payment system. Our second goal is to create a platform for collaboration, data collection, comparison with multiple architectures, and other future research. For these purposes, we publicly release all software in our research under the MIT open source license.”
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Phase one of the project consists of two different ‘contacts’ that address performance, durability and resilience issues associated with CBDCs.digital dollar‘ covered the work of implementing the architecture.
“The first idea is to separate transaction verification from execution; this will allow to use a data structure that stores very little data in the core compute processor. It will also make it easier to scale parts of the system independently. The second idea is a transaction format and protocol that is secure and provides ‘flexibility’ for potential functions such as self-storage and future programmability. The third idea is to create a system design that efficiently executes these operations, which we do not implement with two architectures, and build a commitment protocol.
Both architectures met and exceeded our speed and efficiency requirements.”
According to the project’s whitepaper, phase one of the project highlighted key information regarding the ‘digital dollar’ design.
“Selected ideas from cryptography, distributed systems and blockchain technology can provide unparalleled functionality and powerful performance…
CBDC design options are more detailed than is generally assumed… And by implementing a robust system, we pose new questions for CBDC designers and policy constructs to the tradeoffs in performance, auditability, functionality, and privacy.”
Project Hamilton now plans to move into a second phase where alternative technical designs will be explored from a wide variety of research topics.
“Research topics may include cryptographic designs for privacy and auditability, programmability and smart contracts, offline payments, secure issuance and refund, new use cases and access models, techniques for maintaining open access while protecting against denial of service attacks, and new tools for enforcement. ”