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--- cbdc:public:cbdc_omg:04_doc:90_recommend:93_recomend:start [2022/05/13 17:58]
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 ====== 6.11 Perform Research Development Test & Evaluation (RDT&E)  ======
-[[cbdc:private:cbdc_omg:04_doc:90_recommend:start| Return to Recommendations]]
+|< 100% >|
+| [[cbdc:public:cbdc_omg:04_doc:90_recommend:start| Return to Recommendations ]]  |  <WRAP>
+<html><b>
+<a href="mailto:[email protected]?Subject=OMG's CBDC WG Response:
+.11 Perform Research Development Test & Evaluation (RDT&E)
+">Provide Feedback</a></b>
+</html>
+</WRAP>  |
 ===== Overview =====
-[[cbdc:private:cbdc_omg:04_doc:90_recommend:93_recomend:start | Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:90_recommend:93_recomend:start| Return to Top]]
-There are a couple of ways that the OMG members recommend pursuing a U.S. CBDC [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:r:rtd_e | Research Development Test & Evaluation (RDT&E) ]] effort.
+There are a couple of ways that the OMG's CBDC WG members recommend pursuing a U.S. CBDC [[https://www.omgwiki.org/dido/doku.php?id=dido:public:ra:xapend:xapend.a_glossary:r:rtd_e | Research Development Test & Evaluation (RDT&E) ]] effort.
   * Either the Federal Reserve directly funds the RDT&E effort
@@ Line 34: / Line 41: @@
   : 12. National Science Foundation<sup>**‡**</sup>
     : <sup>**‡**</sup> //- participate in the STTR Program //
+</table>
+===== Limitations of Blockchain Technology =====
+[[cbdc:public:cbdc_omg:04_doc:90_recommend:93_recomend:start| Return to Top]]
+Orla Ward and Sabrina Rochemont presented a list of Limitations to Blockchain Technologies to the Institute and Faculty of Actuaries. ((
+Orla Ward, Sabrina Rochemont,
+__An addendum to “A Cashless Society- Benefits, Risks and Issues (Interim paper)” - Understanding Central Bank Digital Currencies (CBDC)__,
+Institute and Faculty of Actuaries,
+page 17-18,
+March 2019,
+Accessed: 18 May 2022,
+[[https://www.actuaries.org.uk/system/files/field/document/Understanding%20CBDCs%20Final%20-%20disc.pdf]]
+)). Table {{ref>understandCBDC}} presents a summary of the limitations outlined by Orla et al. Many of these are issues are similar to those proposed by the OMG's CBDC WG members in [[cbdc:public:cbdc_omg:04_doc:90_recommend:93_recomend:start#possible_sbir_sttr_topics| Possible SBIR STTR Topics]].
+<table understandCBDC>
+<caption>Limnitations of Blockchain Technology.((
+Orla Ward, Sabrina Rochemont,
+__An addendum to “A Cashless Society- Benefits, Risks and Issues (Interim paper)” - Understanding Central Bank Digital Currencies (CBDC)__,
+Institute and Faculty of Actuaries,
+page 17-18,
+March 2019,
+Accessed: 18 May 2022,
+[[https://www.actuaries.org.uk/system/files/field/document/Understanding%20CBDCs%20Final%20-%20disc.pdf]]
+))
+</caption>
+|<100% 5% 20% >|
+^  Paragraph Number  ^ Title  ^  Description  |
+^ 4.7.1 ^ Slow transactions | <WRAP>
+Physical performance affecting public Blockchains is a major limitation and barrier to adoption, as
+this comparative chart illustrates.
+<figure TransactionSpeed>
+{{  cbdc:04_doc:15_common:50_international:screen_shot_2022-05-15_at_6.32.42_pm.png?500  |}}
+<caption>Cryptocurrencies Transactions Speeds compared to Visa and Paypal((
+HowMuch.net,
+__Transactions Speeds: How Do Cryptocurrencies Stack Up To Visa or PayPal?__,
+Accessed: 15 May 2022,
+[[https://howmuch.net/articles/crypto-transaction-speeds-compared]]
+))</caption>
+</figure>
+</WRAP>|
+^ 4.7.2 ^ Consensus time delay | <WRAP>
+The mining process (“Proof of Work”) requires vast amounts of computing power to record
+transactions and because all payments require miner approval, there is a limit on the number of
+transactions that can be processed at any time. Once a transaction has been completed, it is
+irreversible. Miners are critical to ensuring the validity of each transaction and are rewarded by
+receiving newly created digital currency units. The alternative “Proof of Stake” attributes mining
+power to the proportion of tokens held by the miner and may help improve performance in the future.
+</WRAP>|
+^ 4.7.3: ^ Scalability | <WRAP>
+Most digital currencies have a source code that outlines the precise number of units that can and will
+ever exist and so there is a finite supply. Over time, it becomes more difficult for miners to produce
+digital currency units until the upper limit is reached. Digital currency's finite supply makes them
+inherently deflationary, more akin to gold and other precious metals than fiat currencies. This too
+places pressure on the price of digital currencies, unlike fiat currencies for which Central Banks
+can, in theory, produce an unlimited supply
+</WRAP>|
+^ 4.7.4 ^ Design | <WRAP>
+It has been suggested that many issues with the performance of public Blockchain stem from
+excessive decentralization, leading to inefficiency. Further research and development activity will
+likely resolve the trade-off between decentralization and performance.
+</WRAP>|
+^ 4.7.5 ^ Link into the real economy | <WRAP>
+The environment within Blockchain cannot be extrapolated outside of Blockchain, for instance, to
+translate “proof of ownership” into “proof of possession” (e.g. of a house). Blockchain must solve the
+real-life trust problem and needs to interface with a trusted central mechanism outside of Blockchain.
+</WRAP>|
+^ 4.7.7 ^ Security  | <WRAP>
+Blockchain is trusted for being a highly secure, impenetrable technology as all users share the same
+information that has been verified by the miner. The security of a Blockchain is guaranteed through
+the use of cryptographic functions that are deemed to be relatively secure because breaking them
+requires huge computing resources, which are not generally available. However, it has been
+suggested that they are not completely immune from advances in technology, namely the rise of
+quantum computing. Unlike ordinary computers that operate on a binary system accepting bites of
+the form 0 or 1, a quantum computer works with particles that can be in superposition. Rather than
+representing bits of value 0 or 1, quantum computers would have particles represented by qubits,
+which can take on the value 0, or 1, or both simultaneously. Quantum computing may have the
+potential to break the cryptography that conventional Blockchain relies upon as they are much more
+powerful. However, such an issue may be solved using next-generation technology by using
+quantum cryptography in Blockchain and so the entire Blockchain may be a quantum phenomenon
+</WRAP>|
+^ 4.7.8 ^ Vulnerability | <WRAP>
+All Blockchain systems have to address the inherent problems of double-spend, and issues such as
+blocks that have detached from the chain, accidentally or through attacks. As Blockchains are
+implemented in software, any number of software vulnerabilities can also exist due to poor code
+implementations.
+</WRAP>|
 </table>
 ===== Possible SBIR/STTR Topics =====
-[[cbdc:private:cbdc_omg:04_doc:90_recommend:93_recomend:start | Return to Top]]
+[[cbdc:public:cbdc_omg:04_doc:90_recommend:93_recomend:start| Return to Top]]
-The following subsections are provided by the OMG members on some possible RDT&E topics and some discussion the Federal Reserve can pursue with a partnering Federal Agency (see {{ref>sbirOrgs}}
+The following subsections are provided by the OMG's CBDC WG members on some possible RDT&E topics and some discussions the Federal Reserve can pursue with a partnering Federal Agency (see {{ref>sbirOrgs}} for a list of possible Federal Government Department SBIR/STTR partners.
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