According to a Pentagon-commissioned assessment, the blockchain is not decentralized, can be attacked, and uses out-of-date software. According to the report tagged; “Are Blockchains Decentralized, Unintended Centralities in Distributed Ledgers?“, a fraction of participants may exert centralized control over the entire blockchain system.
The findings obtained from the report are worrisome for many industries, but they are particularly worrisome for the fintech, security, big tech, and cryptocurrency sectors, all of which are expanding.
The Defense Advanced Research Projects Agency (DARPA); the Pentagon’s research division, hired Trail of Bits, a security research firm, to study the blockchain. Bitcoin and Ethereum were the main focus of Trail of Bits.
According to Trail of Bits, Ethereum can be disrupted by just two entities, whereas Bitcoin can be disrupted by four. Additionally, only three ISPs handle 60% of all Bitcoin traffic. The firm also found outdated, unprotected software and blockchain protocols.
The report surfaced weeks after the Luna crash. The decentralized stable coin TerraUSD, which was tied 1:1 to the US dollar, fell to 30 cents in May 2022 as a result of the failure of a blockchain algorithm. Financial experts warn that the Luna meltdown was an important lesson about the risks of the blockchain.
Cryptocurrencies have been in a complete catastrophe ever since the Luna crash, with investors liquidating their holdings and billions of dollars missing. The global economy, issues with the supply chain, rising federal interest rates, inflation, and an impending recession all continue to have an impact on cryptocurrencies. The DARPA-commissioned paper raises more questions about the blockchain and has an impact on how investors view it and their level of confidence.
Due to their flexibility, immediacy, product potential, and ability to give the entire world’s population quicker access to financial services, cryptocurrencies and blockchain operations are also now deeply entwined in numerous businesses. Security continues to be a primary priority, problem, and worry in this new financial digital era.
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