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No gold is perfect, no man is perfect - blockchain technology is far from perfect

Time : 03/02/2022 Author : qyclfs Click : + -
        Blockchain is the basic technology of cryptocurrency and has broad prospects. However, it has also been found that there are major vulnerabilities, which may cause users to lose billions of dollars. A study by the Massachusetts Institute of Technology (MIT) analyzed 72 security vulnerability cases of the blockchain system publicly reported from 2011 to 2018, with a total amount of US $1 billion, and some companies lost as much as US $600 million. In the final analysis, although the blockchain system represents progress in encryption and security, it is as fragile as other technologies in some aspects, and there are also new vulnerabilities unique to the blockchain. The addition of blockchain has been very effective for many companies, and some of them have made their stocks soar just by adding the concept of "blockchain" to their names.
 
        Proponents of distributed ledger technology claim its transparency, distributed control and anonymity as well as improved security. Having said that, although the blockchain system has made some progress in encryption and security, according to some recent reports, there are still many problems with this technology, which is far from "indestructible". Although a recent study at the Massachusetts Institute of technology focuses on 72 publicly reported security vulnerabilities, madnick pointed out that considering that some network attacks are not publicly reported, there may be more security vulnerabilities. It is reported that the violations in the past eight years have caused the company to suffer losses ranging from 12000 US dollars to several hundred thousand US dollars.
 
        Blockchain may be its own biggest enemy, because many things that make it so powerful also increase its vulnerability in security. Three examples include transparency, distributed control, and anonymity. Regarding transparency, considering that the blockchain ledger and software code have been copied on many servers and can be viewed by many people, this leaves room for "bad guys" to access and study. The technology has distributed characteristics, in which there is no "on" or "off" switch of the central computer, which means it is difficult to prevent intruders from withdrawing funds from more and more funds. In addition, the anonymity provided to blockchain users of "blockchain keys" composed of long numbers also poses a threat.
 
        Although this number is impossible to guess, so it has its security advantage in this sense, but "there is no coverage function on your blockchain account". Therefore, if you lose your key, the account will also be lost. In one case, according to pcmag, the CEO of a cryptocurrency exchange died unexpectedly, resulting in the failure to recover $180 million of customer funds. According to another report in the Wall Street Journal, as many as 40 start-ups have applied to the US Securities and Exchange Commission (SEC) to use blockchain as an authorized broker when the news of the security breach came out. According to the report, since the regulatory authorities stepped up law enforcement against crypto issuers at the beginning of last year, these applications, including those of companies wishing to launch electronic trading platforms, have not been approved.
 
        This reflects the regulatory obstacles and heavy delays that many encryption companies, as well as major companies such as Facebook, which are expanding their encryption scope, may face. The German central bank and Deutsche Boerse jointly conducted this experiment to observe whether the blockchain can be cheaper and faster than the current settlement mechanism. The joint initiative was launched in 2016 and ended at the end of 2018. German central bank governor Jens & middot; Jens weidmann said: "although the prototype" in principle meets all the basic regulatory functions of financial transactions ", it is not superior from the perspective of cost or efficiency.
 
        He said that in fact, the pilot project of using blockchain to transfer and settle securities and cash is more costly and slower than the traditional method. The blockchain solution does not perform better in all aspects. The process takes longer and leads to relatively high computing costs. Similar experiences exist elsewhere in the financial sector. Although a lot of tests have been conducted on blockchain based prototypes, there has been no real breakthrough in applications so far. ". Yves middot, member of the Executive Board of the European Central Bank; Yves mersch pointed out that it is important to distinguish "assets" such as bitcoin from the distributed ledger technology behind them.
 
        He warned people not to adopt policies that stifle innovation, and stressed that according to CNN's report, the European Central Bank is an evaluator of innovation development, not a blocker. "Some technologies are worth exploring and may also attract the interest of the central bank," he said. "In other words, our role is not to promote the adoption of technology by the industry and the public, but to ensure that changing preferences are met in a safe manner.". Although recent reports have highlighted the disadvantages of blockchain and the bank's research on blockchain is disappointing, many blockchain supporters are still full of confidence in this technology, just like the Internet in the 1990s, which has completely changed the world.
 
        
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