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šŸ‘€ Bank of Korea finds performance issues with CBDC blockchain tech šŸ‘€
November 07, 2022
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TheĀ Bank of KoreaĀ completed the second phase of its retail central bank digital currency (CBDC) simulations in late June and today shared the results. While it was happy with some aspects of itsĀ digital wonĀ simulations, such as using CBDC for offline payments and cross border remittances, the central bank highlighted performance issues with the blockchain technology.Ā 

Specifically, it found the overall performance of the Ethereum-based blockchain insufficient, including the scaling solutions and privacy technology that was tested.Ā 

ā€œThere will be some limitations in real-time processing of transactions during peak timesā€, said the Bank of Korea.

One of its tests simulated peak demand by sustaining 4,200 transactions per second (TPS) for 30 minutes. At that activity level, users sometimes had to wait up to a minute for a response (latency).

However, the system can handle an average TPS of 1,000, which is typical of many Korean micropayment systems, but not peak periods such as lunchtimes or payment deadlines.

The scalability limitations of Ethereum are widely known, and in response, numerous Layer 2 scaling solutions have been deployed in the crypto sector, particularly rollups. The Bank of Korea tried using rollups with up to 700 transactions on each subnetwork. The rollups performed fine when both sides of the transaction took place on the same subnetwork. However, there were very significant performance issues when a large proportion of transactions were between subnetworks.

Another performance challenge related to usingĀ zero knowledge proofsĀ (ZKP). This technology can prove that someone owns the CBDC without exposing the details of their identity data. The central bank found using ZKP required up to 14 seconds per transaction. ZKP is also widely known to have performance challenges, although some alternative approaches partly mitigate this. We’re not clear which ones were used.

The bank also tested transfers between ledgers using different blockchain technologies for the purchase of non-fungible tokens and for cross border CBDC remittance. It used hash time lock contracts (HTLC) and was satisfied with these. The cross border CBDC was simulated with the United States and used commercial banks as intermediaries.

CBDC technology partners

As previously reported, the central bank selectedĀ Ground XĀ as its primary technology partner for the simulations. Ground X is the web3 subsidiary of Korea’s largest social network Kakao and the founder of the Klaytn public semi-permissioned blockchain. Klaytn is based on Ethereum technology, and for its pitch, it partnered with Ethereum development houseĀ ConsenSys, which is still involved in the project.Ā 

Other companies involved in the project includeĀ Samsung Electronics, KPMG, Kakao Bank, Kakao Pay,Ā S-coreĀ (digital transformation consultants),Ā Kona IĀ (prepaid cards),Ā Dream SecurityĀ (authentication),Ā ZkryptoĀ (zero knowledge proofs),Ā OnTherĀ (layer 2 scaling) andĀ NGLEĀ (software testing).

Now that the second phase of simulations is complete, the central bank has started working with 14 commercial banks and the Korea Financial Telecommunications & Clearings Institute (KFTC). The banks are Kookmin, Shinhan, Woori, Hana, Nonghyup, Enterprise, Suhyup, Busan, Gyeongnam, Daegu, Gwangju, Jeonbuk, Kakao, and K.

Next steps for CBDC

The Bank of Korea outlined its next phase of work which centers around the banks. For example, the ability to integrate the simulation system with the banks’ internal systems. And to check the performance when onboarding large numbers of users. It is creating a Virtual Private Network to communicate securely with these intermediary banks.Ā 

Apart from the pure technical aspects, it also plans to explore potential use cases and is considering involving other types of companies in the simulations, such as credit card firms and securities companies.

The central bank also hinted at possible additional cross border experiments. ā€œWe plan to cooperate with financial institutions and international organizations,ā€ it said.

Meanwhile, various central banks around the world are progressing with their trials. Both theĀ Monetary Authority of SingaporeĀ (MAS) and theĀ European Central BankĀ (ECB) are separately starting to explore programmable money applications of retail CBDC.

There are an increasing number of cross border CBDC projects. MBridge out of Hong Kong recentlyĀ shared its latest resultsĀ and announced plans toĀ go into production. MBridge includes the central banks of Hong Kong, China, UAE and Thailand.

A newĀ Project Mariana, including the central banks of France, Switzerland and Singapore, will explore using DeFi for foreign exchange for cross border CBDC. The New York Fed launchedĀ Project CedarĀ for faster FX settlement. And MAS announcedĀ Project Ubin+Ā for cross border payments. All of these are wholesale CBDC projects.Ā 

Two of these, MBridge and Cedar, have created bespoke blockchains in part to address performance challenges.

Additionally, there’sĀ Project IcebreakerĀ involving the central banks of Norway, Sweden and Israel to explore retail CBDC cross border payments.

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šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
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US Dept of Commerce to publish GDP data on blockchain

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šŸ’³ PayPal:Ā 
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List Of Cardano Wallets

Well-known and actively maintained wallets supporting the Cardano Blockchain areĀ Eternl,Ā Typhon,Ā Vespr,Ā Yoroi,Ā Lace,Ā ADAlite,Ā NuFi,Ā Daedalus,Ā Gero,Ā LodeWallet,Ā Coin Wallet,Ā ADAWallet,Ā Atomic,Ā Gem Wallet,Ā TrustĀ andĀ Exodus.

Note that in case of issues, usually only queries relating to official wallets can be answered in Cardano groups across telegram/forum. You may need to consult with specific wallet support teams for third party wallets.

Tips

  • Its is important to ensure that you're in sole control of your wallet keys, and that the keys used can be restored via alternate wallet providers if a particular one is non-functional. Hence, put extra attention toĀ Non-CustodialĀ andĀ CompatibilityĀ fields.
  • The score column below is strictly a count of checks against each feature listed, the impact of specific feature (and thus, score) is up to reader's descretion.
  • The table represents current state on mainnet network, any future roadmap activities are out-of-scope.
  • Info on individual fields can be found towards the end of the page.
  • Any field that shows partial support (eg: open-source field) does not score the point for that field.

Brief info on fields above

  • Non-Custodial: are wallets where payment as well as stake keys are not shared/reused by wallet provider, and funds can be transparently verified on explorer
  • Compatibility: If the wallet mnemonics/keys can easily (for non-technical user) be used outside of specific wallet provider in major other wallets
  • Stake Control: Freedom to elect stake pool for user to delegate to (in user-friendly way)
  • Transparent Support: Easy approachability of a public interactive - eg: discord/telegram - group (with non-anonymous users) who can help out with support. Twitter/Email supports do not count for a check
  • Voting: Ability to participate in Catalyst voting process
  • Hardware Wallet: Integration with atleast Ledger Nano device
  • Native Assets: Ability to view native assets that belong to wallet
  • dApp Integration: Ability to interact with dApps
  • Stability: represents whether there have been large number of users reporting missing tokens/balance due to wallet backend being out of sync
  • Testnets Support: Ability to easily (for end-user) open wallets in atleast one of the cardano testnet networks
  • Custom Backend Support: Ability to elect a custom backend URL for selecting alternate way to submit transactions transactions created on client machines
  • Single/Multi Address Mode: Ability to use/import Single as well as Multiple Address modes for a wallet
  • Mobile App: Availability on atleast one of the popular mobile platforms
  • Desktop (app,extension,web): Ways to open wallet app on desktop PCs
  • Open Source: Whether the complete wallet (all components) are open source and can be run independently.

Source

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šŸ’³ PayPal:Ā 
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XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

Ā 

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