Are the promises of decentralization and security false?

Bitcoin

Since its birth in 2009, bitcoin’s success has been based on two main promises: Decentralization and complete security, The world’s first and most powerful cryptocurrency is being praised by its proponents as a digital, free and fair monetary system. Centralized Wall Street Hegemony and a choice of national currencies such as the US dollar. Open to all with Internet access, decentralized and seamlessly secure across thousands of networks, without a central ruler. This is the myth of bitcoin. One of the top blockchain security firms is now shaking up this fascinating narrative.

“Are Blockchains Decentralized?” That’s the name of a 26-page report by experts at Trail of Bits. Founded in 2013, the firm secures some of the biggest crypto projects including Ethereum, Polygon, Polkadot and Chainlink. She advises Web2 giants such as Microsoft, Google and Zoom. He designed the study on behalf of DARPA, the US Pentagon’s research division known for the invention of the Internet.

Conclusion of Report on Bitcoin? intelligence. The usual defenders of bitcoin in the space (Anthony Pompliano, Michael Sayler, Jack Dorsey & Co) have kept a low profile so far. BTC-ECHO will get classification from experts in the next few days. Here are the most important results.

Bitcoin and company are at risk.

  • 1. With so-called proof-of-work consensus algorithm, miners keep the bitcoin network alive, They generate new blocks, guaranteeing the authenticity of the database and the security of the system. According to Trail of Bits, 51 percent of that activity goes to four largest mining group Return. This means that 0.004 percent of miners control more than half of the network’s computing power, the hash rate.
  • 2. 60 percent of bitcoin traffic is routed through just three ISPs, each of which is highly centralized and error-prone, including Amazon Web Services. They can simply deny access to individual nodes in the network(s) or reduce their speed if they want to.
  • 3. About 55% of bitcoin nodes also run on the dark web browser, Tor. A failure or attack on this ecosystem could also have far-reaching consequences for Bitcoin. For example, Tor was attacked last year by a Russian hacker who briefly occupied 40 percent of the network’s nodes.
  • 4.85% of the amount of bitcoin in circulation is concentrated in less than 5% of holders.
  • 5. According to Trail of Bits, ViaBTC, the world’s leading mining pool, uses the password 123 for its accounts. The mining organization does not verify the pooling login credentials at all. Slushpool also instructs its users to ignore the password field. These three miners collectively account for about 25 percent of the bitcoin hash rate.
  • 21% of bitcoin nodes are still running on outdated software known for their security vulnerabilities from June 2021.
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In the past, studies have repeatedly found that some areas of blockchain are not as decentralized as they are marketed. Chainalysis came to the conclusion that in decentralized organizations about one percent of the members have about 90 percent of the voting rights.

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In the area of ​​NFTs, about 80 percent of digital artifacts are owned by ten percent of people, at least on the Ethereum blockchain, according to another study by Chainalysis.

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