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Cryptocurrency growth in 2021
More than 10% of those surveyed said they’re invested in cryptocurrency, ranking the digital coins fourth after real estate, stocks, mutual funds and bonds
Security is the first priority for users when choosing a crypto exchange Source: Binance Global Crypto Index 2021
Blockchain is based on the ideas of consensus, decentralization, and cryptography to ensure transaction trust. However, many blockchain security issues have arisen due to faulty technology implementation:
- People aren’t being able to authenticate who they are in a trustless election or vote without giving up their identity or data, and being able to trust the results.
- Your data (for example: identity, transaction history…) can be traced and used to manipulate their opinions and decisions.
- Especially in crypto world, the leak of users' data and transactions will have an enormous effect on users’ governance votes and project decisions.
Current consensus systems such as Proof of Work or Proof of Stake have drawbacks that make them diﬃcult for adaptation to devices. For example,
- The Proof of Work system requires strong computational power and large amounts of memory on the
- end-node side, which are costly for consumers to adopt. A “mining machine” for Bitcoin costs over USD 2000 per set.
- Mining under the PoW protocol is deliberately consumptive of power. It is estimated that the Bitcoin network uses 0.14% of the global energy consumption and more power than several developing nations.
- As the PoW system gets bigger, the whole network slows down.
- The Proof of Stake system still requires large amounts of memory on the end nodes, and also large amounts of tokens to be able to win the Blockchain reward. The rich get richer under the PoS system.
- Both PoW and PoS are leading to the centralization and accumulation of mining power into the hands of a few entities. Under PoW, giants like Bitmain’s mining pools control close to 51% of Bitcoin’s mining. Similarly, under PoS, original adopters of Ethereum who own large stakes can easily rake in all the fees from the network.