Two researchers at University College London have created a digital currency that they hope will be a „centralized” version of Bitcoin. The project was initiated at the suggestion of the Bank of England, which wants a virtual currency that a central bank can manage (control). The new currency, called RSCoin, shares with Bitcoin the use of cryptography to create „unforgeable” digital cash. Another similarity will be the verification of transactions by recording them in a database with a complete history of cash movements.
Bitcoin's transaction ledger is supported by a network of computers around the world managed by various individuals and companies not affiliated with any central authority. The code behind Bitcoin limits the number of Bitcoin units to 21 million (currently in circulation). 15 million). Unlike Bitcoin, RSCoin’s transaction ledger is controlled by the central bank, which will also hold a special encryption key through which it will control the amount of money in the market. This will allow the bank to make adjustments like the quantitative easing made by the Federal Reserve and other central banks after the 2008 financial crisis. A small number of third-party organizations would be chosen by the central bank to process new transactions and send them to the central ledger. These third-parties would include large commercial banks.
RSCoin has so far been tested on 30 computers in Amazon's cloud platform. Bhagwan Chowdhry, a UCLA finance professor is quoted by MIT Technology Review as saying that RSCoin would make money circulate faster and be more easily accepted on a large scale than Bitcoin. There are really two types of audiences for virtual currency as we know it now – those who prefer independence over a centralized solution (niche users, more open to risk) and those who perceive a controlled currency as safer and more familiar (a broader audience, which may include the business community).
The idea behind Bitcoin goes beyond virtual currency, however. A consortium of 11 major banks, including UBS and Credit Suisse, announced the completion of the first test of software based on similar technology, which could be used to trade financial assets such as bonds or derivative. The experiment has already taken place within Microsoft's cloud platform, Azure. It's what Microsoft CONSIDERS to be "the next big thing".
What do you think, will Bitcoin be replaced by RSCoin?