Wed. Feb 1st, 2023

Is Cryptocurrency Safe?

Cryptocurrency and blockchain are not only rosy futures. Aside from the issue of hacking the exchange, decentralization through consensus is causing scalability problems, and maximum transparency and invariance are causing personal information protection problems. MEXC 거래소 나라 In fact, it takes much more time for 1 million people to vote to reach an agreement than for 10 people, and as recent research shows, it is very difficult to delete any posts or videos on the blockchain that may violate my privacy.

Pow and other technologies used to prevent voting manipulation through civil attacks are causing excessive power consumption problems, and the emergence of professional miners armed with high-performance dedicated equipment and Botnet, which secretly mines bitcoins using other people’s computers, is hindering the voluntary participation of ordinary users.

In addition, incomplete anonymity and open sources with weak security are also acting as obstacles to cryptocurrency activation. So today, I’d like to examine the factors that dim the outlook for cryptocurrency

Let’s pay attention to bitcoin futures trading

It is believed that many people are not recovering from losses as Bitcoin’s rise was not achieved only last year and the adjustment market was prolonged. In this case, it is worth considering bitcoin futures trading. Upbit and Bithumb are both spot transactions.

As you know, since Bitcoin futures ETF was listed last year, all attention has been focused on bitcoin futures trading. I recommend the Bitget cryptocurrency exchange. It is the top 10 global exchange based on the coin market tab for $10 billion in daily transaction.

Advantages of Bitcoin Futures Trading

1. Up to 125x leverage investment is possible

(Even if the seed money is small, you can earn a lot of money.)

2. Both rising and falling investments are possible

(Individual short selling is also made easy)

3. Low commission compared to Korea

If you sign up for Bitget using the above route,

50% discount on spot and futures transaction fees for life

1. Scalability issues

In short, blockchain will make all members (computers) play the role of banks.

In other words, every time a cryptocurrency transaction occurs, all members make a book (block) and share only the books that the majority of the members admitted to be right (correct) with each other to prevent fraudulent transactions without the help of the central bank.

However, it is not as easy for everyone to make blocks and check them. As the number of people increases and the number of transactions per second increases, it becomes more difficult.

If 10 people make 1 transaction per second, each person can record 10 transactions in the block, but if 1 million people make 1 transaction per second, each member must leave 1 million transactions per second and verify it. This soon results in a delay in transaction approval time, which is called a ‘expandability problem’.

The easiest way to solve the scalability problem is to delegate the task of creating and verifying blocks to a few. This is called ‘consortium blockchain’ or ‘private blockchain’.

Blockchain in the form of Bitcoin and Ethereum that anyone can participate in is called a public blockchain. This is also called a “fermissionless blockchain” or “unauthorized (public) blockchain,” which best reflects Satoshi Nakamoto’s decentralization philosophy in that all members can participate in the agreement process of maintaining and managing the blockchain.

On the other hand, there is also a type of blockchain that requires prior approval to participate in the agreement process, which is called a “consortium blockchain” or a “private blockchain.” It is also called ‘permitted permissionad blockchain’ or ‘permitted (closed) blockchain’ by combining private blockchain and consortium blockchain.

Since this type of blockchain restricts participants in advance, anonymity is not guaranteed because all identities are revealed in the process, and the consensus algorithm is simpler than the public blockchain, and there is no need for compensation for participating in network operation. It’s not differentiated from the traditional central server method

I’m always haunted by criticism. Cryptocurrencies that use this type of blockchain include Ripple and Coda.

2. Problems with excessive power consumption

The place where it takes the most time to create a block is to solve the cryptographic puzzle and calculate the PoW value.

As the price of cryptocurrency soared, those seeking compensation wanted to create and spread blocks faster than anyone else, and as a result, graphics cards that can upgrade the performance of computers were even in short supply.

Furthermore, professional miners armed with high-performance parallel computers have emerged, and the annual amount of electricity they consume is expected to surpass that of Malaysia or Sweden for a year (as of 2019).

Microsoft founder Bill Gates also said, “Bitcoin consumes more electricity per transaction than anything known to mankind, as cryptocurrency mining, which requires cooling to run tens of thousands of computers 24 hours, 365 days a year, is prevalent in underdeveloped countries where electricity is relatively cheap. “It produces an average of 300 kilograms of carbon dioxide in each transaction,” he criticized.

Moreover, in the case of China, where mining plants are concentrated, he warned, “If Bitcoin mining is left as it is, it will disrupt the national goal of realizing carbon neutrality in 2060.

Fortunately, unlike Bitcoin, various methods such as Pos, which uses less power, are being researched and developed to solve these problems, but it seems that it will still take time to become popular.

3. Oracle Issues

Information recorded once on the blockchain cannot be modified and deleted even by the recorded party or manager, so transparency (securing reliability can be useful for important applications).

However, if false information is recorded on the blockchain from the beginning, it cannot be prevented by the blockchain itself, but rather, the information cannot be modified due to the invariance of the blockchain, which can make the situation worse than in general.

As such, blockchain may be the most vulnerable at the interface between online and offline, which is called the first mile problem or the Oracle problem.

Oracle is divided into software Oracle and hardware Oracle, depending on where the information comes from. Importing online information through software such as URLs is called software Oracle, and importing information from autonomous vehicles or smart farms through sensors is called hardware Oracle.

However, solving the Oracle problem is not that simple. To solve this problem, first of all, it is necessary to determine who should receive information from without a central trust agency, and second, how reliable the information received in this way is. In addition, there should be a way to verify whether someone has replaced this information while importing it.

By Andrew