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Thomas Kudrycki, Chief Technology Officer, eCurrencyI was a bit concerned about central banks using blockchain technology for their digital currencies, considering the amount of power it uses, but it isn't necessary for Central Bank Digital Currency (CBDC). Phew! Some central banks also see Bitcoin as the central banks’ competitor andbecause of the digital currency’s association with Bitcoin, many central banks have assumed that Central Bank Digital Currency (CBDC) must be based on a similar set of technologies. This assumption is wrong, and the opposite is actually true....... Consensus. Bitcoin transactions require an elaborate and computationally expensive consensus to verify the validity of the transactions. When using banknotes, the transacting parties do not require a consensus
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Thomas Kudrycki, Chief Technology Officer, eCurrencyI was a bit concerned about central banks using blockchain technology for their digital currencies, considering the amount of power it uses, but it isn't necessary for Central Bank Digital Currency (CBDC). Phew! Some central banks also see Bitcoin as the central banks’ competitor andbecause of the digital currency’s association with Bitcoin, many central banks have assumed that Central Bank Digital Currency (CBDC) must be based on a similar set of technologies. This assumption is wrong, and the opposite is actually true....... Consensus. Bitcoin transactions require an elaborate and computationally expensive consensus to verify the validity of the transactions. When using banknotes, the transacting parties do not require a consensus
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Thomas Kudrycki, Chief Technology Officer, eCurrency
I was a bit concerned about central banks using blockchain technology for their digital currencies, considering the amount of power it uses, but it isn't necessary for Central Bank Digital Currency (CBDC). Phew!
Some central banks also see Bitcoin as the central banks’ competitor andbecause of the digital currency’s association with Bitcoin, many central banks have assumed that Central Bank Digital Currency (CBDC) must be based on a similar set of technologies. This assumption is wrong, and the opposite is actually true.
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Consensus. Bitcoin transactions require an elaborate and computationally expensive consensus to verify the validity of the transactions. When using banknotes, the transacting parties do not require a consensus above the consensus not to rob one another. When one pays cash for goods or services, the only consensus necessary is that the two transacting parties deliver the value and the payment. It is straightforward and does not have to be complicated by complex algorithms. A significant portion of the Bitcoin approach and the underlying technical implementation is, therefore, fundamentally useless in the context of CBDC.
China thinks out of the box.
“...most institutions, including regulators, study digital currencies based on blockchain technology, and the People’s Bank of China has broken through that thinking. If it is based on blockchain technology, then the use of digital currency can only be limited to blockchain, [and the use case] scenarios are greatly limited. The digital currency designed by the People’s Bank of China can be used on-line or off-line, even without a network, let alone blockchain. Therefore, we can imagine the space that uses the [PBOC digital currency] is very large.” (footnote 4)
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