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Proof of Bitcoin enabled to work unlikely to succeed
Monday, the Bank of International Settlements (BIS) of Basel, based in Switzerland, the so-called central bank of central banks, published a document entitled "Beyond the economy of the day of trial" trial of labor "in criptovalute . " A research publication, created by BIS principal economist Raphael Auer, explained that the old-fashioned Proof of Work (PoW) block processing mechanism could fail over time with Bitcoin (BTC).
Auer has focused his argument on the Bitcoin issuance program, pointing out that the fall in block premiums will eventually kill the efficient and low-cost nature of BTC transactions – stating that chain processes will take hours, days or even days spread over months to reach the goal. He wrote:
And with the blocking premiums – which currently represent the vast majority of miners' income and thus support payment security – being phased out, security of payments is also deteriorating.
The BR researcher continued to touch Lightning Network, SegWit and other potential scaling solutions that could solve Bitcoin problems. Although he acknowledged that Lightning Network, probably the second most promising layer of the Bitcoin network, saw a semblance of adoption, he was skeptical of the long-term benefits the system would provide. More specifically, he wrote that there is a trade-off between efficiency and centralization. With all this (and more) in mind, through the abstract of the paper, Auer wrote:
Therefore, it seems unlikely that current technology will replace the current monetary and financial infrastructure. Instead, the question is rather how technology could complement existing agreements.
It is interesting to note that Auer's joke on Bitcoin's PoW-centric consensus system comes just days after Bryce Weiner, a blockchain developer claimed that mining could become extinct. In a discussion on Twitter, Weiner, a former software developer of Reuters and Lockheed Martin, gave some limitations to the stocks of Bitcoin, pointing out that what gives cryptocurrencies "the real financial power" is the ability to mint their own money, before praising the stake test. (PoS) consensus mechanism.
Weiner added that the marginalized "stand out more to benefit from this technology", and as such, the Proof of Work currencies, like Bitcoin, are more targeted to those who have "privileges". coins and tokens will see adoption by the less privileged, creating further request for altcoin.
Interviewed BIS respondent skeptical of Crypto
In a recent survey conducted by the BIS, it was revealed that its members, a number of central banks around the world, are skeptical about cryptocurrencies. As reported by Ethereum World News at a previous date, BIS respondents were skeptical about the potential for encryption. The outlet, which put its hands on the data, said that more than half of the 63 respondents said that cryptocurrencies were used only "trivially", or were not used at all.
28% of the polls said that blockchain-based assets were used exclusively by niche groups, such as the growing number of Bitcoin supporters and the financially marginalized (many of whom do not have access to adequate services).
The interviewees said that the lack of cryptocurrency adoption can be attributed to the hesitation of retailers to accept this nascent form of money, regulatory uncertainty, public skepticism towards Bitcoin and prohibitions of exclusion / severe restrictions in some countries.
And while the BIS survey did not reveal that central banks are getting the authority to offer internal cryptographic activities, or are working on blockchain related projects, the respondents said they are different from issuing a sovereign digital currency "for wholesale settlement" over the next three years.
Title Image Courtesy of Chris Li Via Unsplash
