Tech Gaming Report

Latest Tech & Gaming News

Bitcoin

Are the promises of decentralization and security a lie?

Since its birth in 2009, the success of Bitcoin has been based on two fundamental promises: Decentralization and absolute security. The world’s first and most powerful cryptocurrency is being hailed by its proponents as an independent and fair digital monetary system, an answer to the Centralized hegemony of Wall Street and an alternative to national currencies such as the US dollar. Open to everyone with Internet access, decentralized and perfectly protected on thousands of networks, without a central rule. This is the myth of Bitcoin. One of the leading blockchain security firms is now shaking up this compelling narrative.

“Are Blockchains Decentralized?” is the name of the 26-page report from the experts at Trail of Bits. Founded in 2013, the firm secures some of the largest crypto projects including Ethereum, Polygon, Polkadot, and Chainlink. She advises Web2 giants like Microsoft, Google and Zoom. She prepared the study on behalf of DARPA, the US Pentagon Research Department, known among other things for the invention of the Internet.

The conclusion of the Bitcoin report? Sobering. The usual Bitcoin advocates in the space (Anthony Pompliano, Michael Saylor, Jack Dorsey and Co.) have so far kept a low profile. BTC-ECHO will get expert rankings in the next few days. Here are the most important results.

Bitcoin and company are at risk.

  • 1. With the so-called proof-of-work consensus algorithm, miners keep the Bitcoin network alive. They generate new blocks, guarantee the authenticity of the database and the security of the system. According to Trail of Bits, 51 percent of that activity goes to four of the largest mining collectives return. That means 0.004 percent of miners control more than half of the hash rate, the computing power of the network.
  • 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 could also simply deny access to individual nodes in the network (nodes) or throttle their speed if they wanted to.
  • 3. Nearly 55 percent of Bitcoin nodes also run on a 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 took over 40 percent of the network’s nodes.
  • 4. 85 percent of the amount of bitcoin in circulation is concentrated in less than 5 percent of holders.
  • 5. The world’s leading mining pool, ViaBTC, uses the password 123 for its accounts, according to Trail of Bits. Pooling mining organization does not verify login credentials at all. Slushpool even instructs its users to ignore the password field. These three mining collectives account for about 25 percent of Bitcoin’s total hash rate.
  • 21 percent of Bitcoin nodes are still running on old software known to have security vulnerabilities as of June 2021.
See also  Perfect as a dedicated machine for Amazon Music, Sony Walkman "NW-A100" | Best Buy 2020 - Engadget Japanese Version

In the past, studies have repeatedly found that certain areas in the blockchain are not as decentralized as advertised. Chainalysis concluded that around one percent of the members of decentralized organizations have around 90 percent of the voting rights.

read too

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

Do you want to buy cryptocurrencies?

In our guide, we show you how you can buy and sell cryptocurrencies in just a few minutes.

to the guide