Centrally Banked Cryptocurrencies

17 November 2015, 12.00 PM - 17 November 2015, 1.00 PM

Sarah Meiklejohn (UCL)

MVB 1.06 Merchant Venturers Building, Woodland Road

Current cryptocurrencies, starting with Bitcoin, build a decentralized block chain-based transaction ledger, maintained through proofs-of-work that also serve to generate a monetary supply. Such decentralization has benefits, such as independence from national political control, but also significant limitations in terms of computational costs and scalability. We introduce RSCoin, a cryptocurrency framework in which central banks maintain complete control over the monetary supply, but rely on a distributed set of authorities, or mintettes, to prevent double-spending. While monetary policy is centralized, RSCoin still provides strong transparency and auditability guarantees. We demonstrate, both theoretically and experimentally, the benefits of a modest degree of centralization, such as the elimination of wasteful hashing and a scalable system for avoiding double-spending attacks. (Joint work with George Danezis.)

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