But there was a reason Narula had been chosen to start the session. In the years since her 2016 TED talk on the future of money, which has reached 2.5 million viewers, she’s gained a reputation globally for remarkably clear communication about incredibly complex and politically charged ideas in digital currency. She’s emerged as a neutral, trusted source of knowledge about financial technologies that very few people genuinely understand.
Narula was able to help senators quickly learn not only how digital currency works today, but also how it could be redesigned to better address concerns around ethics, privacy, security, equity, and innovation. She knows that ultimately it will be policymakers who decide whether and how to build a CBDC, and her goal is to make sure they know the trade-offs that will come with every decision. For example, she told senators that “two-tier” CBDCs, which require a commercial bank account and function the same way electronic payments work today, could be less financially inclusive and harder to continually improve than another much-discussed design that the DCI likens to creating digital cash. While that approach would necessitate new technology, it doesn’t require that users have a commercial bank account, making it potentially more accessible to the approximately 7 million people nationwide who do not.
“We had never really been able to make digital payments without an intermediary in the middle before.”
Narula was introduced to the digital-currency world after finishing her PhD studies on databases and distributed systems at MIT in 2015. She had been taking a few months off to figure out where she wanted to go with her research, knowing she wanted to get involved in building technology to address problems affecting people’s everyday lives. During this break, she spent a lot of time hanging out with friends who had gotten interested in Bitcoin. It was attracting plenty of attention on campus: in 2014 Jeremy Rubin, then an MIT student, helped raise half a million dollars to AirDrop $100 in Bitcoin each to more than 3,000 undergrads.
Narula says Rubin hoped his experiment would get more people interested in researching Bitcoin, but she didn’t pay much attention. Then her friends told her that Bitcoin was having trouble scaling—the system was struggling to process a growing number of transactions. Narula had spent a lot of time considering how to scale systems. Suddenly she was obsessively reading not just about Bitcoin but also about the technology of money in general and how it works in the world of central banks, fractional reserve banking, payment systems, and credit cards. She saw an opportunity to solve a real problem by helping reinvent how money changes hands.
“We had never really been able to make digital payments without an intermediary in the middle before,” Narula says. “This was the first time that that was happening, and it was happening with a really interesting technology.”
Narula got into Bitcoin right at the start of the “blocksize war,” a period from 2015 to 2017 when people started fighting for control over Bitcoin protocols as the cryptocurrency’s user base grew and limitations were placed on transaction size.
“These worlds are very different, the cryptocurrency world and the central-banking world.”
Partly in response to that battle, Rubin cofounded DCI with former White House Office of Science and Technology Policy advisor Brian Forde. Forde became DCI’s first director and started building a team focused on Bitcoin security. Narula joined as director of research in 2016, and though she’d initially been ambivalent about Bitcoin, she quickly became one of the world’s most respected authorities on it. Within a year, Forde stepped back and Narula took control. She’s been DCI’s director ever since.
These days, once or twice weekly, Narula visits the DCI corner offices on the MIT Media Lab’s third floor, where there’s a giant light-up Bitcoin sign that marks the research DCI was founded to do. Bitcoin security—and the insights it can provide about other cryptocurrencies—remains a DCI priority. But Narula has extended the initiative’s scope, with pilot projects on a variety of new types of digital currencies. One of DCI’s biggest undertakings yet is Project Hamilton, a multiyear research collaboration between DCI and the Federal Reserve of Boston that is exploring the technical challenges of designing a CBDC.
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