Bank of England to Launch Its Own Bitcoin Version Called RSCoin
RSCoin – this is the new cryptocurrency that the Bank of England is working on. Bank of England which is also England’s central bank has announced plans to launch its own Bitcoin-like cryptocurrency, which will be named RSCoin and will function on the same blockchain ledger technology that powers Bitcoin.
Ever since the Bitcoin was launched, the mainstream banks had opposed the idea of having a digital currency for lack of controls. But over the years many banking institutions have been showing interest in the blockchain technology behind the bitcoin. While other interested banks have hired agencies to carry out research work regarding blockchain technology, the Bank of England thought it would be a better idea to ask local researchers from University College London. And by the look of things, BoE wants to take matters one step further and issue its own centralized version of Bitcoin.
RScoin, as this BoE’s cryptocurrency would be called, creates a form of digital cash that cannot be tampered with or counterfeited. RSCoin was originally designed by two researchers at University College London and works very similar to Bitcoin but provides a lot more centralized control. The Bank of England would be the sole party controlling this distributed ledger, and would also be in the possession of a special encryption key. This key would allow the bank to add or subtract cryptocurrency from the ledger, as a way to control the blockchain’s total size and to follow national and international financial regulations put in place after the most recent financial crisis from 2008.
Two researchers who were chosen for the job by BoE spent two months investigating blockchain technology which forms the basis of bitcoins and came up with their own version which is heavily customised to meet the requirements of England’s central banker. The researchers stated that they have tested RSCoin on 30 servers inside Amazon’s cloud computing service. Now, the researchers are in talks with the BoE on how to implement this system across the financial channels.
The new initiative by Bank of England has been welcomed by all but a few issues remain. RSCoin’s supply will be controlled by the bank which can harm its valuation. Also, many experts feel, that this can give powers to certain individuals in BoE to manipulate the rates according to their whims and fancies.
Basic difference between RSCoin and Bitcoin being, bitcoin is a fully decentralized digital currency, accessible to everyone in the world outside of banking channels. Over the years Bitcoin has gained reputation among users as well as its harshest critics. It remains to be seen whether a controlled cryptocurrency like RSCoin can gain similar momentum as bitcoin.
More details about RSCoin can be found in the Centrally Banked Cryptocurrencies research paper by George Danezis and Sarah Meiklejohn, which was presented at the Network & Distributed System Security Symposium that took place last month in San Diego.