The National Science Foundation, an independent agency of the U.S. federal government, has awarded a $ 225.000 grant to the private blockchain startup KRNC to design crypto functionality for the dollar at a time when the digital dollar is a topic of national debate.
The KRNC project
Key Retroactivity Network Consensus, or KRNC, is a protocol that allocates a cryptocurrency with limited offerings such as bitcoin in fiat dollars. The digital currency will be distributed free of charge to users in proportion to the funds they already have, so anyone who owns dollars can interact with decentralized applications without having to buy cryptocurrencies such as bitcoin or ether.
To receive funding, the KRNC proposal was reviewed by a group of external experts and assessed for merit and commercial potential.
Anna Brady-Estevez, head of the National Science Foundation's grant program, said the agency had no specific end-use warrant for any of its small business awards.
"We focus on projects where there is significant technical work to be done with the potential to drive competitive advantage and commercial impact," said Estevez. He then specified that the project showed potential in developing a new technology that improves the security of financial transactions.
"Our funding for this protocol should not be misunderstood as supporting any initiative to boost the US dollar or make it more like bitcoin or any other cryptocurrency," said Estevez.
'Proof-of-Balance'
According to the CEO and chief scientist of KRNC Clint Ehrlich, the protocol is based on a concept of his invention: Proof-of-Balance. "Bitcoin, which is based on the proof-of-work principle, is wasteful," said Ehrlich.
"It requires people to waste money and computing power to solve unnecessary problems." KRNC intends to adopt an approach that measures the resources people already own, such as the dollar, to assign voting power in proportion to an individual's existing wealth.
One feature that KRNC is particularly interested in including in its cryptocurrency is the limited offer, inspired by bitcoin - find out how to exchange it with Bitcoin Pro - often compared to gold. Ehrlich intends to guarantee the scarcity of its digital gold by blocking the offer at the launch.
"If there are $ 15 trillion at launch, it will only be possible to unlock $ 15 trillion [crypto]," said Ehrlich. Users who wish to acquire digital gold can deposit fiat money in banks during the allotment period and receive crypto currency.
Once the currency is assigned, users are free to purchase goods and services or exchange it in the same way as bitcoin. According to Ehrlich, Bitcoin's Proof-of-Work system works like an auction where those who pay the highest cost through mining have control of the blockchain.
In the case of KRNC's currency, however, "The playing field is not limited to a few buyers or a minority, but to the billions of people who own fiat money," he said.
