In the future, physical banking systems will likely find it difficult to function smoothly due to a wide range of factors. Experts have started developing and testing technical studies that will allow for a more thorough assessment of a CBDC aka Central Bank Digital Currency in the United States. The study is highly relevant for Digital Virtual Currency Depository Market. The MIT researchers investigated elements such as transaction volume and speed and system resilience in general, among other prerequisites. They hope to develop a viable digital currency that includes extensive design flexibility.
The project, dubbed Project Hamilton, is still in its early stages, and the research isn't meant to be used as a pilot or in a public setting. Instead, the researchers looked into two different ways of transaction processing, which could show the technological feasibility of a future CBDC model.
This project provides a location to experiment with and cooperate on more complex digital money functions and a platform for building and comparing more viable concepts. The team wanted to demonstrate the throughput, latency, and resilience of a system that could support a payment economy on the scale of the United States. Thus, they built a high-speed transaction processor for a centralized digital currency. It's important to note that this project isn't a recommendation for the United States to issue a CBDC. However, research like this is critical in determining the answer to that question.
For the software systems, the researchers created two entire sets of computer source code, or "codebases." One program could handle 1.7 million transactions per second, with 99 percent of those transactions taking less than a second to complete. This stat is far above the fundamental goal of 100,000 transactions per second. The other codebase had a transaction rate of around 170,000 per second. That degree of throughput would allow a central bank to complete every transaction. Further, it will also allow the expansion of other machine-to-machine transactions, both of which would be critical to a possible CBDC.
Researchers designed architectures where the central bank didn't necessarily need to see or keep [a lot] of user information. Adding that policy choice will ultimately guide CBDC privacy procedures.
A hypothetical future digital dollar would face enormous technical challenges. Researchers are pleased with the creation of the processing engine that has the functionality and flexibility to grasp how money might work in the future.
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