A blockchain startup KRNC has been awarded $225,000 to design cryptocurrency like features for the dollar. The National Science Foundation is an independent agency in the U.S. federal government. That too when there is still a lot of fuss going around the world about the digital dollar.
KRNC is a National Scientific Funded blockchain company that can convert fiat money into digital money by the proof-of-balance algorithm. Soon it will be released as a completely decentralized protocol. And everyone will be able to use it as a cryptocurrency alternative.
KRNC (Key Retroactivity Network Consensus) will design a cryptocurrency to fiat dollars. This digital currency will be distributed to the users without any charge. In other words, unlike Bitcoin or other cryptocurrencies, this currency is not required to purchase. By using this crypto feature for dollars, it will be easy to deal with other decentralized platforms.
The National Science Foundation decided to give this grant to KRNC after closely reviewing the model and its uses. Anna Brady-Estevez, the program manager in the foundation said the potential merits and demerits were mentioned in the application. Only after initially calculating the benefits of KRNC, the grant was awarded to the company.
According to the authorities at the National Science Foundation, the technical aspects of this innovation seemed powerful. It can impact the market because of the competitive nature to traditional cryptocurrencies.
Due to the nature of cryptocurrency of being secure, the KRNC will also increase the security of financial transactions. However, Estevez confirmed that this grant should not be misinterpreted as a bias help towards the dollar. This grant is not an endorsement to influence the dollar at all.
Proof-Of-Balance Instead Of Proof-Of-Work
What is proof-of-work?
Proof-of-Work or PoW is the consensus algorithm that is used in the Blockchain. Whenever a new transaction is confirmed in the Blockchain, new blocks are formed. This is the algorithm of Blockchain to perform transactions.
The PoW is also used by the miners to get rewarded on every completed transaction. The information on each transaction is sent in terms of tokens and these tokens are collected in the form of blocks by the ledger.
This algorithm has its own set of benefits. It prevents anti-DoS attacks and also creates mining possibilities. However, why is it needed to replace this algorithm to use other currency instead of cryptocurrency?
The short answer is a waste of money and endless computing of complex crypto power problems. KRNC works on the approach of measuring the assets. For example, people already own dollars. In that case, they can have a proportionate amount of digital dollars equal to their wealth.
What Is Proof-Of-Balance?
This is a new technology in the field of cryptocurrencies. Unlike Bitcoin, where the blockchain is owned by anyone who buys the cryptocurrency at a higher price. The proof-of-balance algorithm doesn’t work on this requirement.
It means the blockchain will remain secure even if the adversary has control over the digital currency. This protocol also protects the cryptocurrency from external attacks. Thus, it can perform more securely and reliably.
Taking an example of Bitcoin, KRNC is going to freeze its digital cryptocurrency. It will create a sense of scarcity of this digital currency among the users. This will happen at the launch of this innovation according to the company.
If anyone wants to acquire digital currency, they can deposit fiat dollars in their account and get it assigned to them. After the currency is assigned, they can use it purchase goods or trade the gold. In short, it will work the same way Bitcoin works.
Another important feature is to use the digital currency to buy something or to trade it separately from the fiat money. Or it can also be used as a digital dollar. This digital gold works hand in hand with fiat money. No matter what’s the price of one of them, both are protected against the volatile market.
In the proof-of-work algorithm, the Bitcoin is in control of anyone who pays the highest cost of mining. Just the way auction works. The KRNC digital currency works opposite to it.
If the opposite party tries to purchase the large chunk of this digital currency, the initial fiat money will remain secure. It is way more secure than Bitcoin, that too at no extra cost. It is not just available to miners and traders, but anyone who owns fiat money can have KRNC.