Bigger cryptocurrencies are at greater risk due to lack of trust, stability

Doris Richards
June 20, 2018

"The quest for decentralized trust has quickly become an environmental disaster", the report summarised. He said, "Cryptocurrencies promise a lot but they don't deliver". Without users it will simply be a worthless token. With every money transfer, the ledger swells in size. For cryptocurrencies, each update of the ledger comes with an additional proof-of-work that an attacker would have to reproduce.

"A thought experiment illustrates the inadequacy of cryptocurrencies as an everyday means of payment".

The paper calculated what it would take for the blockchain software underpinning bitcoin to process the trillions of retail transaction now swirling through national payment systems. But the issue goes well beyond storage capacity, and extends to processing capacity: only supercomputers could keep up with verification of the incoming transactions.

The BIS analysed what it would take for the blockchain software to process the digital retail transactions now handled by national payment systems and concluded that "the associated communication volumes could bring the Internet to a halt". The BIS extrapolates that if Bitcoin was to process all global payments in its current state, the decentralized network would overload everything from mobile devices to servers around the globe and effectively break the internet.

The report also considered the growing need for a "redrawing of regulatory boundaries", which considers the drawbacks and limitations of cryptocurrency in line with the boundaries of its usage.

Are you looking for a comprehensive summary of the most idiotic nocoiner propaganda against Bitcoin?


In particular, the report stated that worldwide financial transactions can become much more efficient and easier thanks to the blockchain. This results in things like the high transactions fees of Bitcoin, along with the low transaction-per-second rate that it can handle.

"In a decentralised network of cryptocurrency users, there is no central agent with the obligation or the incentives to stabilise the value of the currency: whenever demand for the cryptocurrency decreases, so does its price". This makes cryptocurrencies look like a house of cards in the middle of a storm.

The findings of the BIS come at a time when the "currency" of digital coins has not fallen.

Shin says that here is talking about "uncertainty about the finality of individual payments, as well as trust in the value of individual cryptocurrencies".

"In mainstream payment systems, once an individual payment makes its way through the national payment system and ultimately through the central bank books, it can not be revoked". This can result in transaction rollbacks, for example when two miners update the ledger nearly simultaneously.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER