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The Almighty Buck Bitcoin United States

Fed Designs Digital Dollar That Handles 1.7 Million Transactions Per Second (forbes.com) 166

Posted by BeauHD from the built-on-open-source-software dept.
An anonymous reader quotes a report from Forbes: As the race against China's development of its central bank digital currency (CBDC) known as the digital yuan continues, the U.S. Federal Reserve accomplished a feat in testing a design for a U.S. digital dollar that in one of two tests, managed to handle 1.7 million transactions per second. A report released last Thursday provided the initial findings of research conducted as a collaboration between the Boston Fed and the Massachusetts Institute of Technology (MIT). Dubbed 'Project Hamilton,' the report describes a theoretical high-performance and resilient transaction processor for a CBDC that was developed using open-source research software called 'OpenCBDC'.

According to the Fed's Report, a core processing engine for a hypothetical general purpose CBDC was created that produced one code base capable of handling 1.7 million transactions per second. According to the Fed, the vast majority of transactions reached settlement finality in under two seconds. The Fed revealed the design of the CBDC transaction processor was also released on GitHub. According to the Boston Fed, the second phase of Project Hamilton will demonstrate how OpenCBDC will build upon the initial model to allow flexibility in design that will incorporate how policymakers may implement an actual CBDC.
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Fed Designs Digital Dollar That Handles 1.7 Million Transactions Per Second More

Fed Designs Digital Dollar That Handles 1.7 Million Transactions Per Second

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  • They are missing the point. (Score:4, Insightful)

    by olsmeister ( 1488789 ) on Wednesday February 09, 2022 @09:10AM (#62252121)
    We are looking for digital currencies that do not give the government or other controlling entities buckets of information about every monetary transaction you make.

    • Re:They are missing the point. (Score:5, Insightful)

      by GrumpySteen ( 1250194 ) on Wednesday February 09, 2022 @09:11AM (#62252123)

      Because there's no way the government could look at the publicly available blockchains for existing cryptocurrencies and gather information?

      • Re:They are missing the point. (Score:5, Insightful)

        by splutty ( 43475 ) on Wednesday February 09, 2022 @09:27AM (#62252167)

        They can track *wallets*. As long as your wallet isn't connected to you in any way (don't use exchanges for example), then there's no way to connect you to a wallet.

        The problem is, that's not a realistic use case, so no one does that, which means you're trackable everywhere.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          Even if you did, you have to ask the network to make a transaction for you, and certain governments have invested a lot in recording traffic on the Internet. There's also the wonderful feature of a screwup any time in the future revealing your entire transaction history.

    • We are looking for digital currencies that do not give the government or other controlling entities buckets of information about every monetary transaction you make.

      Not a single cryptocurrency fits your description. They are, in fact, the opposite of that. Not only is the information collected with (for example) bitcoin, it is literally impossible to delete the information.

    • We are looking for digital currencies that do not give the government or other controlling entities buckets of information about every monetary transaction you make.

      Unless you're making transactions in cash in your bathroom, you're not even able to do this today.

      Surveillance, is everywhere. Your smartphone. Siri/Alexa. Ring doorbells. The intersection you drive through. The parking lot you park in. Your license plate that was scanned on the drive. Then you actually enter the store. Cameras see which isle you went down. Which general shelf you picked an item from. Of course, at this point, your face, your height, even your walking gate, has potentially been docu

      • If you walk or bike,facial recognition isn't terribly good, especially with winter clothes and masks being widespread. Surveillance is more laborious and less efficient than the Piggies that Be would like people to think. Think about how many carjackings, drive-bys, and riots go unsolved "Cashless cash", on the other hand, would create a record of where everyone has been on a given day if they spent so much as a single dollar, unless they stole or used a stolen device. So I'm hoping that adoption will b
    • Im looking for money the government cannot just seize on a whim. Like cash. Asset forfeiture is already a blatant 5th and 14th amendment violation that people are doing nothing to stop. I guess this is one way to eliminate illegal immigration. Without giving up your information there is no way they can transfer money to you. Imagine the mass number of people you could murder by simply flagging them as prohibited to receive transactions. No thank you. I like my cash private and untraceable.

      • Re: (Score:2)

        by nagora ( 177841 )

        Im looking for money the government cannot just seize on a whim.

        Yeah. All those crypto-currency thefts have convinced me that there's no way someone can confiscate them without my permission!

        At least cash can be buried somewhere.

    • Re: (Score:2)

      by Rotting ( 7243 )

      Better to stick to cash if that's the case. Any digital currencies will be tracked.

      • Cash can still be seized through inflation (albeit slowly).

        • Re: (Score:2)

          by nagora ( 177841 )

          There's nothing about a crypto currency that makes it immune to inflation.

          • There's nothing about a crypto currency that makes it immune to inflation.

            Bitcoin employs a mathematically-derived inflation rate that approaches zero by the year 2100. There can only be 20,999,999,9769 bitcoins in existence, so long-term inflation is moot.

            • Re: (Score:2)

              by nagora ( 177841 )

              Inflation is not only, or even primarily, caused by money supply increases.

              • Perhaps it is better to say that inflation is a function of both supply and demand? The primary difference between the two models is that unlike debt-backed currencies, the total supply of Bitcoins is fixed and limited.

    • Re: (Score:2)

      by Junta ( 36770 )

      Note that in the crypto-currencies that people are fawning over, the buckets of information are visible to everyone.

      They are only anonymous so long as your wallet is not linked to an identity. The government, amazon, facebook, or google could rapidly map out pretty much every wallet to a person/business if it were used as a 'currency' in short order, knowing how much money people make, how much they spend, and who they give their money too. Everyone you do business with in the real world would know how mu

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      The point of this is that it is likely some kind of blockchain based currency will be adopted for financial transactions, and they want it to be the US one.

      China has been looking at ways to reduce the US grip on financial transactions that exists because of USD being the most widely used currency internationally. The US uses that fact to extend its laws beyond its borders, claiming jurisdiction over any USD transactions. That's how Meng Wanzhou ended up fighting extradition from Canada to the US, despite no

    • I'd prefer something normies would actually use instead of a negative sum gambling chip.

    • Re: (Score:2)

      by Z80a ( 971949 )

      The tracking is not much of an issue, but the part where the government can't control how many cripto coins etc there are that is the big issue. BTC and similars are basically a bet against the government backed currencies, as they can't peer pressure the network to produce more coins to match their dollar printing etc..

    • you've missed the point.

      this CDBC dollar could be used to collateralise other stable coins, e.g. FRAX, DAI (maker)

      it could then also be pooled, for deep liquidity, on curve.fi against 3crv et al.

      it could be acquired in mass then used to back and support "digital currencies that do not give the government or other controlling entities buckets of information about every monetary transaction you make".

  • Iâ(TM)m probably missing the point here but (Score:3)

    by doubledown00 ( 2767069 ) on Wednesday February 09, 2022 @09:30AM (#62252171)

    Why is this necessary? What function does it serve as a âoedigital dollarâ that the VISA network (or any other digital financial transaction apparatus) canâ(TM)t fulfill?

    • It isn't beholden to Visa/MasterCard/Amex?
    • Figure out the difference between money as in actual central bank currency and private "money" as in debt your bank owes you or vice versa. There are bunch of ways to transact with debt, even if it involves a lot of middlemen, but the only way for average person to transact with actual money is using hard cash. Central bank digital currencies do exist in most developed nations, but only private banks and large corps can use them to settle between themselves. Bringing it to consumer level makes things a whol
    • They can replace cash and simply shut you down in a heartbeat. Deny anyone transferring currency to or from you for any invented red flag status. Murder without due process. Thats the inevitable end goal. Its why China is all for it.

    • Re: I'm probably missing the point here but (Score:5, Informative)

      by ffejie ( 779512 ) on Wednesday February 09, 2022 @10:07AM (#62252227)
      I'm not an expert, but this is actually meant to replace Visa and other payment processors that are currently making 2-3% every time you swipe your credit card. It's an enormous drag on the economy in terms of fees that merchants pay, and the government would rather you transact in good old cash, but there's too many costs around keeping a register full of valuable paper. The government would like you to do things digitally, instantly, and centralized.

      The comparison here probably shouldn't be in to Visa, but rather to something like SWIFT, ACH, or Wire transfers - which actually do move money digitally, but are:

      1. incredibly human intensive, and therefore
      2. slow and
      3. error prone while also being
      4. expensive.
      • SWIFT/Wire transfers are fairly pricey. I think it usually costs me around 30-50 for each transaction, but at least for me it has always been a flat fee. ACH on the other hand is much less than either. I pay nothing to make one and I looked it up and it looks like merchants pay anywhere from 20c ea to a buck for a batch of transactions. I imagine the utilities are paying less per ACH than to process a check. ACH as far as I can tell has no humans involved. SWIFT has a great deal of human involvement, but do

        • Re: (Score:3)

          by ffejie ( 779512 )
          Yeah, I oversimplified by lumping them all together. ACH works really well, but still requires some fees be paid - it's not terrible on this front. I've personally never paid a fee, but like you stated usually someone is. However, ACH is far from instant. It usually takes a day to get to the right account, sometimes much much longer (3-5 days). The reason is that ACH batches all transactions (or many transactions) for the day together, which lowers the transaction cost. The issue is there is settlement risk
          • Ah, so sort of an instant SWIFT. They are going to have to take the human out of it to do that to get the price down. The few times I have done SWIFT I was at the bank physically, with a teller for about 10 minutes and got confirmation funds were transferred before I left. As you say ACH not instant. Really ACH is a check, which is settled pretty much like a check, days. In fact, I think the few companies I still send checks to convert them to an ACH. And I'd switch to ACH with those companies except the du

            • Re: (Score:2)

              by ffejie ( 779512 )

              ...electronic bill pay is it appears as if anyone could stuff my bank account number into a payment and it would go thru. Probably get bounced, but I wonder what protections are in place

              This is the crazy part, this is true!

              If I know your bank account number -- which is written on every check -- and your routing number -- which is also written on every check (also is public if I know your bank) -- then I can make ACH payments! All day long! For any amount! They'll probably settle! (if your account has the funds)

              The issue is when you check out your account sometime in the future, you say: "Hey, this isn't me!" and your bank says: "no problem" and undoes the transaction. They literally ta

      • I'm not an expert, but this is actually meant to replace Visa and other payment processors that are currently making 2-3% every time you swipe your credit card. It's an enormous drag on the economy in terms of fees that merchants pay, and the government would rather you

        ...make transactions that result in them getting your PII directly, rather than having to collect it indirectly from the credit card companies which are already surely part of PRISM. If they collect your info directly there will be less chance that your information will slip through their panopticon.

        The comparison here probably shouldn't be in to Visa

        There's no reason why not, many Visa-transacted purchases are actually cash payments from one's bank account and not made on credit at all. Around half of all debit transactions are processed by Visa.

      • Re: (Score:2)

        by boskone ( 234014 )

        It would be great to have a way to cut out Visa fees for the dozens (hundreds?) of transactions the average american makes. I think the ability for the governement to surveil is probably a little better with this system, but I'm not sure how much it really ads for them.

        I think primarily the government wants to keep the US as a viable reserve currency, and doing this helps that happen.

        I do not want to see a fully cashless society though. While digital payments are great, and very convenient way to get the

        • Re: (Score:2)

          by ffejie ( 779512 )
          I tend to agree with you on all points. It is not hard to imagine that every transaction on Visa's network is already getting logged by the government. Transferring this power to the government directly changes effectively nothing.

          I insist on having a cash reserve available for times when electronic stuff just won't work.

          I'm curious - how much cash are you keeping in your possession? During the beginning of the pandemic, I took out several thousand dollars emergency cash in case things went really oddly. Of course, they didn't and I eventually put most of that back into the bank. (Actually I ended

          • I usually keep about $1000 at home and keep the reserve topped up regularly. I use cash for most day-to-day transactions that aren't online purchases.

            Groceries? Yep.
            Restaurants? Yep.
            Metro/bus trips? Yep.
            Pharmacy? Yep.
            Hardware store? Yep.
            Clothes/shoes? Yep.

            • Re: (Score:2)

              by ffejie ( 779512 )
              Groceries, restaurants is when you lost me - these things are so much more convenient to pay with a card. Having the right bills for tipping is awful.

              Metro/bus trips is when you infuriated me :) You're the guy dropping nickels into the bus machine instead of swiping your card?! I'm kidding of course, but every time I have tried to use cash to buy a (NYC) Metrocard, it has resulted in a lot of pain for me - the machines never want to accept my bills.

              For me, credit card is all about ease of use - it is so m

              • Tipping? You just ask for change and tip from the change. Not hard.

                Metro? Nah, I have a contactless OMNY card that I refill with cash once a month or so.

                I have no interest in knowing what I paid for anything other than business expenses. My budgeting mechanism for all the things I mentioned is to literally take a fixed amount of cash out from the bank every few days. It's not like I'm NOT going to buy that $2 coffee because some budgeting appitty-app crap tells me not to. YOLO, babeh!

                • Re: (Score:2)

                  by ffejie ( 779512 )
                  Tipping at a NYC bar, after going to an ATM:
                  • $18 Drink
                  • Give bartender $20 bill.
                  • Bartender gives you two $1 bills in return.
                  • Now what? I want to leave the staff a $3-$5 tip depending on how elaborate the drink was. This is the situation that has always prevented me from using cash. I never have enough five dollar bills, it seems.
                  • Give the bartender a $20 and a $10 or two $20s, get change, tip. Or tip at the end of the night. It's not an impediment, and bartenders love cash tippers.
        • Nothing wrong with not wanting to be "connected" to someone. Even if for "sordid" reasons. I think that sex workers and dealers of some drugs (pot, but probably not meth) should be able to do business with other consenting adults

      • Re: (Score:2)

        by stikves ( 127823 )

        The problem is transactions inherently have a cost.

        Even cash is not immune. In some segments, VISA can be significantly cheaper than handling cash: https://squareup.com/us/en/tow... [squareup.com]. (loss, counterfeit, stolen, time to sort, etc).

        Blockchains have environmental costs. Even though it can be reduced with "proof of stake", it cannot be eliminated.

        There will never be a completely "free" payment system. Just different trade-offs.

    • Visa takes a cut of over 3% of some transactions. That's one very good reason not to have private companies involved in every transaction. Ideally, I should also be able to hold my government more accountable for my privacy that a private company (or series of private companies). This will also cut down on tax evasion and money laundering if the government were so inclined.

      If you want privacy use a privacy coin like Monero or physical cash. Credit cards leak your privacy with every transaction. Bitcoi

    • It wouldn't leech as much money out of the economy and presumably would not have extra legal censorship.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      VISA is (mostly) a credit issuing agency that runs a transaction network so you can very conveniently borrow from them. There's value in having electronic payments that are not linked to credit. Most of the world has access to at least one pretty good such system, but the US seems to suffer from many not so great options.

      Those systems tend to be run by associations of banks, non-profit or for profit corporations, or the like. Some people might prefer that a payment system be offered entirely by the governme

  • Digital nightmare (Score:3, Insightful)

    by bradley13 ( 1118935 ) on Wednesday February 09, 2022 @10:10AM (#62252231) Homepage
    If the US implements this, note that the government will have direct access to every transaction you make. Privacy = 0.

    They will also be able to cut people off from making certain transactions, and will certainly be able to simply take your money. I have an acquaintence whose bank account was emptied by the IRS. He had to take them to court, when they just said "oops, our mistake." A digital currency would make this even easier. The US government should not have these abilities.

    • Excellent point. What they seem to have is a high capacity centralized permissioned ledger. The challenge is to get a high capacity decentralized permissionless ledger. Shameless plug: I really like Radix [radixdlt.com] in this space. Even has the right suffix :-).

  • Seizable, Ban-able, Hackable (Score:4, Insightful)

    by Vandil X ( 636030 ) on Wednesday February 09, 2022 @10:45AM (#62252311)
    No thank you. Greenbacks are just fine.

    • No thank you. Greenbacks are just fine.

      (5 years from now) That's nice dear. Now hand me another roll of Benjamins for the stove. It's cold in here.

  • The only reason Big Money wants this to happen is to prevent someone in the lower castes to take some rich person's money.
    That's really the only punishable crime these days.

  • Oh Slashdot! Where have the smart people gone? (Score:4, Insightful)

    by xanthos ( 73578 ) <xanthos@toke.PARIScom minus city> on Wednesday February 09, 2022 @12:26PM (#62252695)
    Reading through the comments I have become depressed by the recurring themes.

    "I am so F*ng important that the government wants to track everything I do!" Anyone who believes this needs to get out of the basement more often. The "government" (pick a country, any country) does not care about individuals unless they act in a threatening way, and even the authorities tend to be slow to react. If I had to guess I would say your plans for world domination are still in the preliminary planning stage or else you wouldn't be reading Slashdot and therefore you do not need to worry.

    The whole cash is king is BS. The banking system didn't spring into existence because some Bro thought he could make money off of it. It was created because people with money needed a way to keep it safe from people with the intent of physically separating it from their persons. You are welcome to use cash all you want and personally take on the responsibility of keeping it safe. I pretty much stopped using it a couple of years ago and it hasn't been a problem except when I wanted to buy a box of girl scout cookies.

    • Re: (Score:2)

      by Rinikusu ( 28164 )

      That fucking Girl Scout Cookie Industrial Complex trying to keep our crypto future down!

    • Banking existed long before modern notions of currency or money did. The oldest banks stored your hard currency (precious metals minted into coins) in a vault. Things have changed considerably since then and there's a whole complex history spanning thousands of years that has shaped the present.

      Cash probably won't stick around in the long term for a variety of reasons, chief among them that it doesn't allow governments as much control.
    • The problem is that protests (see the very justified summer 2020 BLM protests) can be seen as a threat if you're a swine in law enforcement. So the swine would love to have a list of people who've been to a demonstration ... if they can't get that kind of list, they could satisfy themselves with a list of people who have been NEAR such a demonstration and bought a bottle of water.
      • Except those protests were and are supported and driven by the Party that currently controls the White House and both chambers of Congress, as well as the governments of each city in which there were riots, and most of the States in which those cities are found. The same Party that managed BLM's fundraising and raised even more money in order to bail out violent rioters so they could perpetrate more politically-motivated violence during a nation-wide insurrection.

        In other words, what you call protests w

    • Re: (Score:3)

      by WallyL ( 4154209 )
      "Act in a threatening way" can vary over time, and if your entire history of transactions is available for examination, something in the past will suddenly now meet the definition. This is bad news for individuals, even if right now you are a very boring person.

  • What makes having a digital currency worthwhile? Why not transact the digital representation of dollars like we do right now? What's the difference and what's the benefit?

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