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The Bitcoin figures rejected the latest cryptocurrency report from the Bank of International Settlements (BIS) after claiming that Bitcoin must stop using the Proof of Work algorithm.
BIS: Bitcoin must abandon the job test
The report, "Beyond the" proof-of-work "ruling day's economy in criptovalute," was released on January 21st.
He focused on double-expense attacks within the cryptocurrency blockchain, as well as on the long-term future of Bitcoin's mining profitability and blockchain stability.
Agustín Carstens, Director General of the BIS
The BIS, also known as central bank of central banks, is well known as an explicit critique of decentralized currencies in particular. His previous announcements generated widespread criticism and even ridicule from the cryptocurrency industry.
"The conclusions are, firstly, that Bitcoin counterfeiting through" double-expense "attacks is inherently profitable, making payment purposes based on extremely costly work evidence," writes Raphael Auer, author of the recent magazine, which summarizes its contents.
Secondly, the transaction market is not able to generate an adequate level of "mining" income through commissions, because users make free-ride on the fees of other transactions in a block and in the next blockchain. Instead, newly issued bitcoins, known as block premiums, have made up most of the mining income to date.
Lightning network doubts
As such, Auer continues, when the blocking premiums eventually become zero, there will not be enough momentum on the Bitcoin blockchain and it may take "months" to confirm a transaction.
The conclusion ignores the increase in commissions, as well as the combined effect of off-line scalability technologies such as the Lightning network, which already allows significant expansion of Bitcoin's processing capabilities.
Auer mentions Lightning, but is largely dismissive, saying:
Second-level solutions such as the Lightning network could be helpful, but the only fundamental remedy would be to abandon the job test, which would probably require some form of social coordination or institutionalization.
In a predictable negative reaction, the supporters of the cryptocurrency have criticized the results, with The Bitcoin standard The author, Saifedean Ammous, repeated the requests to the BIS to engage in a debate on her perspective.
Remember that the head of BIS research has time to give interviews on bitcoin defects, but ignores my offer to discuss these shortcomings: https: //t.co/iCYEet6VqN
– Saifedean Ammous (@saifedean) 21 January 2019
Other reactions have given some consideration to the logic of the relationship.
"I have to give credit to the BIS to identify a decent Achilles heel", a Twitter user responded. "Tax incentives should work, but we can not run it on a test network to prove it, Bitcoin is the testnet."
This week the banking group joins the Bank of England to cast a shadow over Bitcoin. Huw van Steenis, senior adviser to governor Mark Carney, said at the World Economic Forum in Davos that cryptocurrencies in general "fail basic tests".
"They are not a great unit of exchange, they have no value and are slower [than fiat], "He said.
What do you think of the latest BRI report? Let us know in the comments below!
Images courtesy of Shutterstock
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