US Government agency looks at cryptography measures for the US dollar
The National Science Foundation awards $225,000 to blockchain startup KRNC for research on integrating crypto features with fiat dollars
An independent agency of the US government called the National Science Foundation (NSF) bestowed a $225,000 research grant to Los Angeles-based blockchain startup, KRNC, earlier this month. The goal is to develop a new protocol to incorporate some cryptography features into fiat currency.
Clint Ehrlich, chief scientist in the project, stated in a release that the company “Takes the positives of Bitcoin and adds them to money that the public already owns. It’s the virtual equivalent of taping gold to everyone’s dollar bills.”
Cryptocurrencies, especially formats like Bitcoin and Ethereum, are lauded due to their underlying decentralized networks that are based on blockchain technology. It uses cryptography to vastly reduce the likelihoods for criminals to counterfeit or duplicate the currency.
Currently, cryptocurrencies are not issued by governments. Due to the blockchain’s distributed network, digital currencies are immune to government interference, in theory.
Under the new research project funded by the NSF, scientists will work on a crypto protocol they have called the Key Retroactivity Network Consensus (KRNC). The objective is to allocate a scarce form of cryptocurrency, such as Bitcoin, to fiat dollars.
The researchers will distribute KRNC free of charge, so as to allow them to interact with hybrid money in proportion to their existing wealth. In this manner, anyone in possession of US dollars can experiment with the decentralised components of cryptocurrency without having to purchase it.
While the research is currently underway, the US is not planning to make a switch to cryptocurrency or produce a hybrid fiat-crypto dollar of sorts just yet.
The NSG program manager for the grant, Anna Brady-Estevez, explained that the funding “shouldn’t be misconstrued as an endorsement of any initiative to upgrade the US dollar or make it more like bitcoin or any other cryptocurrency for that matter.”
Nevertheless, the pivot towards research and testing is a promising one, as it indicates the NSF has taken an interest in the theoretical limits of the fiat dollar.
Back in March, Rep. Paul Gosar, a US congressman from Arizona, introduced the Cryptocurrency Act of 2020. Gosar intended to provide “much-needed regulatory clarity about cryptocurrency,” with the introduction of the law one step towards his vision of making the US a global leader in cryptocurrency.
“We will make it easier for businesses, institutions, and everyday Americans to participate in this growing industry. No more murkiness, uncertainty, or confusion,” Gosar explained.