Challenges of Deploying a Virtual Currency like Bitcoin

American non-profit global policy think tank RAND Corporation has published an extensive research paper entitled “National Security Implications of Virtual Currency,” to examine the feasibility for non-state actors to increase their political power by deploying a virtual currency like bitcoin.

The research addressed three main points:

  1. Why would a non-state actor (an organization with significant political influence) deploy a virtual currency? What challenges will it have to overcome?
  2. How might a government technologically disrupt a VC deployment?
  3. The purposes of deployment and development of virtual currency broader than currency

An increasing number of banks participating in the R3 consortium, government agencies and central banks are looking into the possibility of deploying their own independent virtual currencies to replace fiat money. However, RAND Corporation explains just why it isn’t as easy as it sounds.

Creating and developing a virtual currency requires a certain level of technological sophistication and infrastructure. Maintenance and deployment of virtual currency requires competencies in networking, computation and cryptographic techniques. The complex mathematical algorithms used to encrypt these currencies are difficult to embrace.

Another challenge is ensuring levels of transaction anonymity demanded by users so that buyers and sellers are assured of proper exchange. One advantage virtual currency could have against fiat money is

Read more ... source: TheBitcoinNews