from Hacker News

Boston Fed releases report, source code of digital currency prototype study

by 60654 on 2/6/22, 4:05 PM with 183 comments

by beefman on 2/6/22, 6:11 PM
"In our design users interact with a central transaction processor using digital wallets storing cryptographic keys. ... Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton's approach, which assumes that the platform would be administered by a central actor."

by ur-whale on 2/6/22, 7:08 PM

FWIW:

https://github.com/mit-dci/opencbdc-tx

Detailed architecture:

https://github.com/mit-dci/opencbdc-tx/blob/trunk/docs/archi...

Some remarks:

    - Seems to be implemented in C++
    - Looks like they reused bits and pieces from the Bitcoin code base (bech32, secp256k1, sha256)
    - Claim of being able to handle 1.7M TPS
    - Experimented with UTXO-style (Bitcoin-like) but seem to have bet on something called "unspent hashes" instead.
    - I found very little on things that matter (policy-related):
       - How is the "central authority" implemented
       - How is the coin supply managed

by nabla9 on 2/6/22, 5:38 PM
Central bank digital currency efforts seem interesting.
1. They make it possible to deliver helicopter money directly to the consumers. Now central banks can only work trough banks or financial markets. Digital currency where everyone has access to central bank money can correct the errors in current systems.
2. Currency would be anchored in real economy with sound monetary policy. Nobody in their right mind takes Bitcoin denominated 10 year mortgage.
by lvl100 on 2/6/22, 6:25 PM
I wasn’t aware they would make this open. It’s a great way to play around with toy digital currency implementation. There goes my plans for rest of weekend.

by ur-whale on 2/6/22, 5:55 PM

Many people on HN claim that the rise of crypto-currencies is a social catastrophe.

Maybe so (I disagree), but wait until central-bank issued digital currencies become a reality, you'll very quickly learn the real meaning of social catastrophe.

Spending 10 seconds thinking about it, I can come up with the following scenarios:

    - complete and utter "financial deplatforming" if you don't behave as a citizen. This is basically China's CCP dream come true.

    - total loss of privacy: the absolute entirety of your financial interactions are an open book to the government. You won't be able to buy a pack of gums without big brother knowing about it, much less paying for your sex toys.

    - security nightmare : how do you guarantee the soundness of such a system when it is centralized. Just ask Sony how long they manage to keep their private keys secret on average.

    - security nightmare : preventing the leakage of citizen's private financial information. If the chain is public, there is none. If it is kept under lock and key by the govt: 1) no way to check what the actual supply is 2) subject to hackage and publishing the data publicly. Knowing the track records of governmental institutions when it comes to IT security, this is basically a guaranteed fuck-up within the first 5 years of such a system existing.

    - economic nightmare: running the printing press full steam is now instantaneous and gives the government even more unchecked power to spend money on brain-dead programs, without leaving any decision-making power to the citizens.

I don't think we will avoid the implementation of such an abomination, but I do believe that - like in everything political - if there's healthy competition from decentralized chains such as Bitcoin, the craziness will be kept in check because there will be an escape hatch to the govt. economic jail.

by igammarays on 2/7/22, 7:46 AM
- Maximum demonstrated throughput ~1.2M transactions per second.
- Geo-replicated latency <1 second.
Amazing technical feat.
[1] https://github.com/mit-dci/opencbdc-tx
by warabe on 2/6/22, 11:04 PM
i was wondering ... what if we circulate coin infinitely to harass central system? like keep exchanging coin between A and B. Can we halt entire system down?
by cryptica on 2/6/22, 5:23 PM
CDBCs are going to be a goldmine for hackers. If implemented as centralized systems, some hackers and insiders are going to have access to unlimited free money. The fact is that nobody, no group of people on this planet is trustworthy enough to implement such an important system. Such people don't exist. Such centralized system is guaranteed to be corrupted.
This is why such important financial systems MUST be decentralized, at least to the extent that anyone should be able to verify the correctness of the system's state independently.
by _-david-_ on 2/6/22, 8:22 PM
Will this basically mean the federal government would have a record of all our transactions?
by throwthere on 2/6/22, 5:13 PM
Should name it PowellCoin— This is what happens when the Fed governors won’t let him print USD any more.
I jest, it actually is kind of interesting and could allow an even closer look at the day to day operations of banks if the ledger was in fact published.
by kangaroozach on 2/6/22, 9:41 PM
FIAT
by jonathan-adly on 2/6/22, 4:35 PM
It’s ironic that they named it project Hamilton. He is probably rolling in his grave now thinking that Jefferson would be finally proven right with CBDC and the insane ever increasing Public debt.
"banking institutions are more dangerous to our liberties than standing armies," Thomas Jefferson
by mjevans on 2/6/22, 5:05 PM
The mention of blockchain in the summary worries me. We have real world data that shows us this only leads to wasted electricity and fabricated silicon shortages/outrageously expensive computer hardware.
The idea of a public ledger and distributed witness signatures is sound though, and that should be the basis of a government approved system of inter-reserve asset tracking.