U.S Federal Government Subsidiary Releases A $255k Funding For “Crypto Dollar” Development
- The U.S. National Science Foundation is funding a blockchain project aiming to introduce a “Proof-of-Balance (PoB) consensus mechanism platform.
- The project aims to directly convert the current supply of circulating dollars into a scarce cryptocurrency allowing users to divert from the volatile cryptocurrencies to the dollar-based digital coin.
In an official announcement by the Key Retroactivity Network Consensus (KRNC), the National Science Foundation, an independent organization under the U.S Federal government is awarding the blockchain project a $225,000 funding from the American Seed Fund to develop a crypto dollar. The American Seed Fund disburses over $200 million to financial and technology startups showing potential in the technical and commercial field.
The crypto dollar will be very much alike to Bitcoin (BTC), given it is scarce, secure and quick to send between peers. However, the project aims to replace the whole crypto market by allowing holders of the dollar to transact on blockchains without the need for BTC, ETH, and other altcoins.
‘A Bitcoin-like platform’
The blockchain will employ a new consensus mechanism, the proof-of-balance (PoB) to replace the ‘wasteful” proof of work (PoW) used on Bitcoin and also the proof of stake set to be implemented on Ethereum 2.0, KRNC CEO and chief scientist Clint Ehrlich said.
According to Ehrlich’s statement, the KRNC’s proof of balance system will enhance the security and management of the platform. Here’s how it works;
The proof of balance system calculates the current wealth of dollars circulating in the global economy and transforming it into a scarce digital asset. Ehrlich explains,
“If today, there is $15 trillion when the currency is launched, it will be possible to only ever unlock 15 trillion [crypto] dollars.”
To ease the transition to the crypto dollar standard users will be able to deposit fiat cash and receive these crypto dollars in return. Users will then be able to use these dollars digitally in a similar way to fiat/ physical dollar that they hold.
Transfer of power to the rich?
The need for blockchains has always been a transfer of power from the centralized rich entities, corporations and governments. However, the proof of balance employed by the KRNC may see the control remain to whoever can pay the most on mining costs.
“Currency is asymmetric so even if an adversary tries to purchase a larger stake, as long as the initial majority of all the fiat money is owned by honest agents the system can remain secure. It’s a way to provide superior security at zero cost.”
Ehrlich believes the current system offers a fairer market giving the billions of people able to access dollars, a voice on the direction of platform. He concludes,
“The playing field is not limited to a few buyers and minors but the billions of people who own fiat money.”
Despite the funding, the National Science Foundation program manager in charge of the grant, Anna Brady-Estevez, emphasized that the National Science Foundation does not endorse the transformation of the dollar into cryptocurrency.