Centralised Bitcoin: A Secure and High Performance Electronic Cash System

Abstract

The initial iterations of the Bitcoin peer-to-peer electronic cash system have demonstrated its benefits as payment system and the superiority of fixed supply, cryptographically secured forms currency over conventional fiat currencies. The operation of the mining process over the last nine years had demonstrated the natural tendency of mining to become a commercially and geographically centralised process, resulting from economies of scale and regional variations in electricity prices. Bottlenecks in transaction processing and increasing transaction costs demonstrate we have now reached the point where Bitcoin should evolve to its next iteration. This iteration will produce vast improvements of performance in terms of transactions processing times, transaction processing costs, transaction process per second and reduction in the creation of greenhouse gases. It will also create a dramatic improvement in security, interoperability with existing financial infrastructure and compliance with international regulatory standards. These improvements will be monumental compared to those that could be achieved through the implementation of Bitcoin Cash or Segregated Witness (SegWit). The proposal is to covert the existing Blockchain data structure to a relational data model and migrate from the current proof of work model to a centralised transaction validation service (TVS).

Keywords: Bitcoin, Cryptocurrency

JEL Classification: G21