Mlion's friends, have you ever thought about how future digital currency could be as secure and private as your secret diary? A recent study by the Bank of England has given us such imaginative space!
Imagine that the digital pound in your hand is not only convenient and fast but also allows your transaction data to be invisible, as if wearing an invisibility cloak. That's right, all of this is thanks to a cutting-edge privacy technology called 'Zero-Knowledge Proofs' (ZK-proofs).
The Bank of England pointed out in its latest report that privacy-enhancing technologies (PTEs) such as zero-knowledge proofs, anonymization, and secure multi-party computation may become important components of the future digital pound. These technologies can minimize data sharing between the central bank and payment intermediaries, giving you greater control over your data and elevating privacy protection.
You might ask, is this a dream? The Bank of England has made it clear that the level of privacy protection for this digital pound can at least match that of existing digital currencies, and it might even surpass them. Of course, any technology has its limitations, but that does not affect our expectations for future digital currencies.
It is worth mentioning that after receiving public feedback during its consultation in 2023, the Bank of England has become more determined to protect user privacy. They have made it clear that neither the government nor the central bank will have access to users' personal data. This is truly a reassurance for all those worried about privacy leaks!
So, what exactly is this mysterious ZK-proofs? Simply put, it is an encryption protocol that allows you to prove that you know certain information without disclosing that information. This technology has been widely used in blockchains such as Ethereum (ETH), Zcash (ZEC), and Polygon (POL), providing solutions for privacy protection and scalability.
However, the Bank of England is also keenly aware that while new technologies bring infinite possibilities, they also face many challenges. Finding a balance between privacy protection and regulatory compliance is not an easy task. They are collaborating with the Massachusetts Institute of Technology's Digital Currency Initiative to explore the potential of these emerging technologies and seek solutions.
Since 2020, the Bank of England has embarked on the journey of exploring the digital pound. They established a dedicated task force to assess the potential design and impact of central bank digital currencies. Although no final decision has been made yet, it is clear that the Bank of England has been actively adapting to the changes in payment technology and the declining trend of cash usage.
Friends, having read this far, are you also filled with anticipation for the future digital pound? Let us witness this privacy revolution in digital currency together!
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The above content is for informational sharing only and does not constitute any investment advice! Investing carries risks, and you should be cautious when entering the market!
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