A US Crypto Dollar?

By:  |  Category: Blog Monday, June 22nd, 2020  |  No Comments

Our wallets might look a little more virtual in the not so distant future.

Why? The US Government is tinkering with developing a cryptocurrency.

At the start of June,, the National Science Foundation (NSF), an independent agency of the U.S. government, awarded a $225,000 research grant to KRNC, a Los Angeles-based blockchain startup. The goal is to create a new protocol that could add crypto features to our current fiat currency.

“KRNC takes the positives of Bitcoin and adds them to money the public already owns,” Clint Ehrlich, the project’s chief scientist, said in a release. “It’s the virtual equivalent of taping gold to everyone’s dollar bills.”

So what is cryptocurrency?

Cryptocurrency is a form of digital money that uses cryptography to make it virtually impossible for scammers to counterfeit or reproduce. Technologies like Bitcoin and Ethereum are celebrated for their underlying decentralized networks, based on a technology called blockchain.

Blockchain uses a widespread network of computers to “mine” the currency. To mine crypto, like Bitcoin, the computers must solve some sort of mathematical puzzle, and whichever miner does it first finishes the transaction. Because cryptocurrencies aren’t issued by governments, and due to blockchain’s distributed network, the digital currency is theoretically immune to government intervention.

In the new NSF-funded research, scientists will further develop a crypto protocol called Key Retroactivity Netowork Consensus (KRNC). It basically allocates a scarce form of cryptocurrency, like Bitcoin, to fiat dollars. The researchers will distribute KRNC free of charge, so that they can interact with the hybrid money in proportion to their existing wealth. That way, anyone in possession of U.S. dollars can play around with the decentralized components of cryptocurrency without actually having to purchase it.

Sounds exciting, but the U.S. isn’t necessarily planning to make a switch to cryptocurrency, or some hybrid fiat-crypto dollar … yet.

Anna Brady-Estevez, the NSF program manager for the grant, told Coindesk that the funding “shouldn’t be misconstrued as an endorsement of any initiative to upgrade the U.S. dollar or make it more like bitcoin or any other cryptocurrency for that matter.”

Currently a US crypto currency is only in the test phase—but it’s a significant step to see the NSF taking an interest in the theoretical limits of the fiat dollar.

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Source: NSF

Image Source: https://www.pexels.com/photo/ripple-etehereum-and-bitcoin-and-micro-sdhc-card-844124/

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