Dutch Central Bank: Blockchain ‘Promising’ But ‘Inefficient’ In Payments For Inability To ScaleJune 7, 2018 2:22 pm
CoinDesk reported Thursday De Nederlandsche Bank (DNB) – in a blog post entry – concluded distributed ledger technology (DLT) is not suitable for its existing financial payment structure because of its insufficient ability to scale for large transaction volumes and other issues.
DNB’s conclusion was based on the results of a project called Dukaton, which conducted a series of experiments testing four DLT prototypes over the past three years, the report said.
Dukaton’s research sought to understand the value of the nascent technology can bring to the country’s existing payment system, CoinDesk reported.
Explaining further, the report said the Dukaton project based its first prototype on the source code of the bitcoin blockchain before the team applied different consensus algorithms and validation mechanisms in later stages.
Following the tests, the report said, DNB acknowledged blockchain can protect against external attacks, however, this protection comes at the expense of “scalability, capacity and efficiency,” the central bank said.
“The current payment systems are very efficient, can handle large volumes and provide the legal certainty of payment,” the blog post said. “The blockchain solutions tested show that they are not sufficiently efficient, with regard to costs and energy consumption, and they can not handle large numbers of transactions.”
The central bank said it will continue investing in further application development and conducting experiments with blockchain technology, CoinDesk reported.
– WN.com, Jack Durschlag