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Issues With Blockchain

What Are Blockchain's Issues And Limitations?

What Are Blockchain's Issues And Limitations?

What are Blockchain's Issues and Limitations? There are treacherous passes in any technological revolution. Some people in the blockchain industry have pointed outthat blockchain has become overhyped, when, in reality, the technology has limitations and is inappropriate for many digital interactions. But through research and development, success and failure, and trial and error, we've learned the currentissues and limitations of blockchains. Blockchain technology involves an entirely new vocabulary. It has made cryptography more mainstream, but the highly specialized industry is chock-full of jargon. Thankfully, there are several efforts at providing glossaries and indexes that are thorough and easy to understand. Blockchains (like all distributed systems) are not so much resistant to bad actors as they are 'antifragile' that is, they respond to attacks and grow stronger. This requires a large network of users, however. If a blockchain is not a robust network with a widely distributed grid of nodes, it becomes more difficult to reapthe full benefit. There is some discussion and debate about whether this a fatal flaw for some permissioned blockchain projects. Bitcoin currently has notable transaction costs after being toutedas near free for the first few years of its existence. As of late 2016, it can only process about seven transactions per second, and each transaction costs about $0.20 and can only store 80 bytes of data. Theres also the politically charged aspect of using the bitcoin blockchain, not fortransactions, but as a store of information. This is the question of 'bloating' and is often frowned upon because it forces miners to perpetually reprocess and rerecord the information. If a blockchain is used as a database, the information going into the database nee Continue reading >>

Fundamental Challenges With Public Blockchains

Fundamental Challenges With Public Blockchains

Source: Theres no question that blockchain technology has enormous potential. Decentralized exchanges, prediction markets, and asset management platforms are just a few of the exciting applications being explored by blockchain developers. Exciting enough, in fact, to raise over billions in ICOs and drive massive price rallies throughout 2017. The hype is real. Dont get me wrong. I love the fact that blockchain hype is helping popularize it with mainstream users. Finally, I dont get blank stares from people when I say Bitcoin or Ethereum. However, theres a flipside to this story that isnt getting enough attention: blockchains have several major technical barriers that make them impractical for mainstream use today. I believe that we will get there, but we need to be realistic as developers and investors. And the reality is that it could be many years before trustless systems are ready for mainstream use at scale. Some of these technical barriers include: In this post, Ill walk through these technical barriers and share examples of solutions for overcoming them. As developers, I believe its critical that we shift some of our focus away from shiny new ICOs to the real technological challenges standing in our way. NOTE: Theres no way I can cover every problem and every solution out there, but I covered the ones Im most familiar with. Please refrain from too harshly criticizing me for not including something. Id love for you to post anything I missed in the comments and Ill add it if I see fit:) And if Ive made any mistakes or wrong assertions, please let me know! Currently, all public blockchain consensus protocols have a challenging limitation: every fully participating node in the network must process every transaction. Why? Well, recall that blockchains are fundamentall Continue reading >>

The Truth About Blockchain

The Truth About Blockchain

Contracts, transactions, and records of them provide critical structure in our economic system, but they havent kept up with the worlds digital transformation. Theyre like rush-hour gridlock trapping a Formula 1 race car. Blockchain promises to solve this problem. The technology behind bitcoin, blockchain is an open, distributed ledger that records transactions safely, permanently, and very efficiently. For instance, while the transfer of a share of stock can now take up to a week, with blockchain it could happen in seconds. Blockchain could slash the cost of transactions and eliminate intermediaries like lawyers and bankers, and that could transform the economy. But, like the adoption of more internet technologies, blockchains adoption will require broad coordination and will take years. In this article the authors describe the path that blockchain is likely to follow and explain how firms should think about investments in it. Weve all heard that blockchain will revolutionize business, but its going to take a lot longer than many people claim. Like TCP/IP (on which the internet was built), blockchain is a foundational technology that will require broad coordination. The level of complexitytechnological, regulatory, and socialwill be unprecedented. The adoption of TCP/IP suggests blockchain will follow a fairly predictable path. While the journey will take years, its not too early for businesses to start planning. Contracts, transactions, and the records of them are among the defining structures in our economic, legal, and political systems. They protect assets and set organizational boundaries. They establish and verify identities and chronicle events. They govern interactions among nations, organizations, communities, and individuals. They guide managerial and social Continue reading >>

Telegrams Ico: Give Us $2 Billion And Well Solve All Of Blockchains Problems

Telegrams Ico: Give Us $2 Billion And Well Solve All Of Blockchains Problems

Telegrams ICO: Give us $2 billion and well solve all of blockchains problems The encrypted messaging companys plan is bold, but short on details. Long Island Iced Tea becoming Long Blockchain this is not. In planning a $2 billion initial coin offering thats meant to launch this month, messaging service Telegram isnt just looking for a quick boost in value. If the dollar amount werent enough to get your attention, consider the ambition behind it: Telegram is promising investors who buy into its home-grown cryptocurrency that it will solve some of the blockchain worlds thorniest problems. This piece first appeared in our new twice-weekly newsletter Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here its free! The ICO space is already on fire, and while Telegram aims to be the richest ever, plenty of other companies have tallied nine-figure crypto fund-raising rounds, with one, called EOS, on pace to raise far more than a billion all founded almost entirely on dreams of blockchain systems that doesnt exist yet. But investors excitement aboutTelegrams offering could be more than froth. Telegram already has more than 100 million users on its encrypted messaging service. Such a clientele also makes a lot of sense for censorship-resistant applications like decentralized file storage, anonymous browsing, and cryptocurrency micropaymentsall of which appear in a leaked white paper describing the so-called Telegram Open Network (TON). How the AI cloud could produce the richest companies ever Delivering on the promises in the white paper will require solving some of the most vexing challenges facing cryptocurrencies. The blockchain holy grail is a system that runs cheaply and efficiently at a large scale while remaining truly decentralized . Teleg Continue reading >>

The 5 Big Problems With Blockchain Everyone Should Be Aware Of

The 5 Big Problems With Blockchain Everyone Should Be Aware Of

The 5 Big Problems With Blockchain Everyone Should Be Aware Of {{article.article.images.featured.caption}} Opinions expressed by Forbes Contributors are their own. The author is a Forbes contributor. The opinions expressed are those of the writer. This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. {{article.article.magazine.subscription_text}} Blockchain is often touted as a world-changing technology and in many ways, it is. However, it isnt necessarily the cure-all panacea for the worlds problems that many evangelists would have you believe. Heres a breakdown of some of the issues with blockchain that anyone thinking of using it should understand. Starting with perhaps the biggest At least, the way it is being used today, it does. Blockchain relies on encryption to provide its security as well as establish consensus over a distributed network. This essentially means that, in order to prove that a user has permission to write to the chain, complex algorithms must be run, which in turn require large amounts of computing power. Of course, this comes at a cost. Taking the most widely known and used blockchain as an example Bitcoin last year it was claimed that the computing power required to keep the network running consumes as much energy as was used by 159 of the worlds nations . Yes, Bitcoins blockchain is a hugely valuable network with a current market capacity at the time of writing of over $170 billion so sophisticated and computationally intense security is essential. Smaller scale blockchains such as those that an organization may deploy internally to securely monitor and record business activity would consume a fraction of that. Nevertheless, its an important consideration and the environmental implic Continue reading >>

What Problems Can Blockchain Generalizably Solve?

What Problems Can Blockchain Generalizably Solve?

Public blockchains (e.g., those used by bitcoin or ethereum) enable two people or organizations to confidently and securely transfer value (e.g., money or a digital asset) electronically from one person or organization to another without an intermediary (e.g., a bank or PayPal). Most people use a third-party ledger on a daily basis even if they dont realize it. It could be your credit card company recording your purchase of a cup of coffee, StubHub recording your purchase of a concert ticket or Apple iTunes recording your purchase of a movie. Buyers and sellers use intermediaries because they may not trust the other party, but they trust that the intermediary will assure the transaction is completed faithfully. However, this trust comes at a cost as each of these intermediaries charge the buyer or seller a fee to maintain a ledger of who owns what. Additionally, an intermediary may prevent certain people or organizations possibly competitors, for example from using its platform. In addition to payments, a small selection of other problems the blockchain can address is maintaining open and transparent government ledgers (e.g., property title), restoring your ownership of digital media (e.g., songs, books and movies), enabling you to listen, watch or read that content on any platform, maintaining an accurate ledger of shares (e.g a private cap table), and verifying the ownership of valuables (e.g., diamonds or art). As a side note, technically, the blockchain solved the Byzantine Generals Problem , but since the question asked for problems it generalizably solves, this is very simple, non-technical answer. 27.3k Views View Upvoters Answer requested by Sebastian Stormbo , Quora User, and 90 more Answered Apr 13, 2017 Author has 272 answers and 289.6k answer views Blockcha Continue reading >>

Scalability Issues Plague Blockchain Technology. Meetzilliqa.

Scalability Issues Plague Blockchain Technology. Meetzilliqa.

Scalability issues plague Blockchain technology. MeetZilliqa. Blockchain technology is poised for another breakout year, so much so that even its staunchest critics are backtracking on previously stated negative comments. However, one key challenge still remains solving the blockchain scaling problem. Many solutions have been proposed , yet none have come to fruition. As the number of blockchain transactions increases , blockchains are growing rapidly in size , resulting in slow transaction times . This is because the number of transactions a blockchain can digest never exceeds that of any of the networks nodes. Blockchains become weaker as nodes are added to it, because inter-node latency logarithmically increases as each new node is added. Thus blockchains are unable to scale to process more transactions. Though cryptocurrencies continue to garner headlines, their lack of ability to compete with mainstream competitors like Visa in terms of transactions per second only becomes more apparent. Enter Zilliqa , a blockchain-powered platform that is implementing network sharding to greatly increase transaction capability. The project started in June 2017 and plans to roll out its public mainnet by Q2, 2018. Network Sharding, the Key to Zilliqas Platform Zilliqa is one of the first blockchain projects to create an infrastructure for the sharding technique. In essence, sharding allows blockchains to break network nodes into smaller groups called shards. These shards work together in parallel in order to reach consensus and process transactions much more rapidly than a traditional blockchain network. Each shard runs the consensus protocol, and a dedicated group aggregates the outputs from each parallel shard, reaching consensus. The result is that blocks of transactions are p Continue reading >>

The Problem With Bitcoin And Blockchain Technology

The Problem With Bitcoin And Blockchain Technology

Evaluate Weigh the pros and cons of technologies, products and projects you are considering. The problem with bitcoin and blockchain technology It's not just bitcoin's prodigious appetite -- it uses as much energy as the country of Slovenia. Security scares and long transaction times cast doubt on its viability. Virtual currencies and their potential role in cyber crime ComputerWeekly.com It's stunning to see the price of bitcoin rocket into the stratosphere. But almost equally surprising is the fact that so many software architects and solution developers, inspired by the bitcoin story, are looking for ways to integrate blockchain technology into their architectures. Download now: Java EE moves to the Eclipse Foundation What are application developers and market analysts saying about Oracles decision to move Java EE to the Eclipse Foundation? What will this change? Find out here. This email address doesnt appear to be valid. This email address is already registered. Please login . You have exceeded the maximum character limit. Please provide a Corporate E-mail Address. By submitting my Email address I confirm that I have read and accepted the Terms of Use and Declaration of Consent. By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers. You also agree that your personal information may be transferred and processed in the United States, and that you have read and agree to the Terms of Use and the Privacy Policy . In the healthcare industry, there is talk about consolidating patient records across hospitals using blockchain. The Republic of Georgia is using blockchain to verify property transactions. Governments are looking at using blockchain to verify the identity of Continue reading >>

Blockchain Scalability: When, Where, How?

Blockchain Scalability: When, Where, How?

Blockchain Scalability: When, Where, How? Angel Investors, Startups & Blockchain developers... Blockchain Scalability, a very real problem! Cryptocurrencies are becoming more and more mainstream. In fact, lets check out how popular bitcoin and ethereum have gotten over time. This is a graph of the number of daily bitcoin transactions tracked over the years: And here we have the number of Ethereum transactions per month over the years: Now, this may look very impressive, but here is the thing, the initial design of cryptocurrencies was not meant for widespread use and adaptation. While it was manageable when the number of transactions was less, as they have gotten more popular a host of issues have come up. The scalability problem of cryptocurrencies For bitcoin and ethereum to compete with more mainstream systems like visa and paypal, they need to seriously step up their game when it comes to transaction times. While paypal manages 193 transactions per second and visa manages 1667 transactions per second, Ethereum does only 20 transactions per second while bitcoin manages a whopping 7 transactions per second! The only way that these numbers can be improved is if they work on their scalability. If we were to categorize the main scalability problems in the cryptocurrencies, they would be: The time is taken to put a transaction in the block. The Time Taken To Put A Transaction In The Block In bitcoin and ethereum, a transaction goes through when a miner puts the transaction data in the blocks that they have mined. So suppose Alice wants to send 4 BTC to Bob, she will send this transaction data to the miners, the miner will then put it in their block and the transaction will be deemed complete. However, as bitcoin becomes more and more popular, this becomes more time-consu Continue reading >>

Bitcoin Scalability Problem

Bitcoin Scalability Problem

For a broader coverage related to this topic, see Bitcoin . The bitcoin scalability problem exists because of the limits of the maximum amount of transactions the bitcoin network can process. It is a consequence of the fact that blocks in the blockchain are limited to one megabyte in size. [1] Bitcoin blocks carry the transactions on the bitcoin network since the last block has been created. [2] :ch. 2 In contrast to Visa's peak of 47,000 transactions per second, [3] the bitcoin network's theoretical maximum capacity sits between 3.3 to 7 transactions per second. [4] [5] The one-megabyte limit has created a bottleneck in bitcoin, resulting in increasing transaction fees and delayed processing of transactions that cannot be fit into a block. [6] Various proposals have come forth on how to scale bitcoin, and a contentious debate has resulted. Business Insider in 2017 characterized this debate as an "ideological battle over bitcoin's future." [7] On 21 July 2017 bitcoin miners locked-in a software upgrade referred to as Bitcoin Improvement Proposal (BIP) 91, meaning that the controversial Segregated Witness upgrade activated at block 477,120. [8] A fork (referring to a blockchain) is what occurs when a blockchain splits into two paths moving forward. Forks on the bitcoin network regularly occur as part of the mining process. They happen when two miners find a block at a similar point in time. As a result, the network briefly forks. This fork is subsequently resolved by the software which automatically chooses the longest chain, thereby orphaning the extra blocks added to the shorter chain (that were dropped by the longer chain). A blockchain can also fork when developers change rules in the software used to determine which transactions are valid. [9] As per CoinDesk , a h Continue reading >>

Blockchain: Background, Challenges And Legal Issues

Blockchain: Background, Challenges And Legal Issues

Blockchain: background, challenges and legal issues Blockchain and distributed ledger technology offers significant and scalableprocessing power, high accuracy rates, and apparently unbreakable securityat a significantly reduced cost compared to the traditional systems thetechnology could replace, such as settlement, trading or accountingsystems. Like all new technology however, it poses challenges for suppliersand customers. So what are the key issues in relation to blockchain anddistributed ledger technology? In its simplest form, blockchain is a decentralisedtechnology or distributed ledger on which transactionsare anonymously recorded. This means the transactionledger is maintained simultaneously across a networkof unrelated computers or servers called nodes, likea spreadsheet that is duplicated thousands of timesacross a network of computers. The ledger containsa continuous and complete record (the chain) of alltransactions performed which are grouped into blocks:a block is only added to the chain if the nodes, whichare members in the blockchain network with high levelsof computing power, reach consensus on the next validblock to be added to the chain. A transaction can onlybe verified and form part of a candidate block if all thenodes on the network confirm that the transactionis valid. And in order to determine the validity of acandidate block, miner nodes compete to solve ahighly complex algorithm to verify it (on the BitcoinBlockchain this is known as the Proof of Work). Thefirst node to solve the algorithm and validate the blockshould be rewarded on the Bitcoin Blockchain thisreward takes the form of Bitcoins and this is referredto as mining for Bitcoins. Please see the diagram onpage 6 for further detail of this process. A block generally contains four piece Continue reading >>

Security And Privacy In Blockchain Environments

Security And Privacy In Blockchain Environments

Security and Privacy in Blockchain Environments June 2017 - Blockchain | Cyber Security | Data Protection & Privacy | Encryption Security and Privacy in Blockchain Environments Matteo Cagnazzo and Chris Wojzechowski, both researchers at the Institute for Internet Security, explore how security and privacy can be enhanced by blockchain technology. Blockchain is currently one of the most-hyped technologies. In this short article we will try to show where current downsides in blockchain security and privacy are. We will explore how security and privacy can be enhanced by blockchain technology and outline the challenges ahead. Transactions are globally published and are not encrypted in most applications. If this data is personal data, for example medical or financial data, this leads to regulatory and legal problems, especially in Germany. One solution is to store only encrypted data in the blockchain, which leads to another problem: If the key to decrypt specific information is lost, the data may not be recovered accurately. Furthermore, if a key is stolen and published, all the data is forever decrypted in the blockchain since the data cannot be altered. However, blockchain can also help to improve defensive cybersecurity strategies, especially in terms of identity and access: One attack scheme for man-in-the-middle (MITM) attacks is to get the Certificate Authority (CA) to provide the user with forged public keys (Public-Key Substitution MITM attack). This can lead to the decryption of sensitive information. In a blockchain approach whereby users put their public keys in published blocks, the information is distributed over the participating nodes with links to previous and following blocks. This makes the public key immutable and it becomes harder for attackers to pub Continue reading >>

Six Main Disadvantages Of Bitcoin And The Blockchain Kaspersky Lab Official Blog

Six Main Disadvantages Of Bitcoin And The Blockchain Kaspersky Lab Official Blog

Blockchain: so cool, what a breakthrough soon almost everything will be based on blockchain technology. If you bought all of that, then I might just disappoint you. This article will discuss the version of blockchain technology that is used for Bitcoin cryptocurrency. There are other implementations, and they may have eliminated some of the disadvantages of the classic blockchain, but usually everything is built around the same principles. I consider the Bitcoin technology itself revolutionary. Unfortunately, Bitcoin has been used for criminal activities far too often, and as an information security specialist, I strongly dislike that practice. Yet, technologically speaking, Bitcoin is an obvious breakthrough. The Bitcoin protocol components and built-in ideas arent new; generally, they were all known before 2009, but only the authors of Bitcoin managed to piece them together to make it work back in 2009. Since then, for almost nine years, only one critical vulnerability has been found in its implementation, when one malefactor snagged 92 billion bitcoins. Fixing that required rolling back the entire financial record by 24 hours. Nevertheless, just one vulnerability in nine years is praiseworthy. Hats off to the creators. The authors of Bitcoin faced the challenge of making it all work with no central system and no one trusting anyone else. The creators rose to the challenge and made electronic money an operational currency. Nevertheless, some of their decisions were devastating in their ineffectiveness. I am not here to discredit blockchain, a useful technology that has shown many remarkable uses. Despite its disadvantages, it has unique advantages as well. However, in the pursuit of the sensational and revolutionary, many people concentrate on the upsides of the tech Continue reading >>

Eight Reasons To Be Skeptical About Blockchain

Eight Reasons To Be Skeptical About Blockchain

Eight Reasons To Be Skeptical About Blockchain I write and consult on digital transformation in the enterprise. Opinions expressed by Forbes Contributors are their own. Given the turbulent, even frothy environment for disruptive digital technologies, one novel entrant promises to be among the frothiest: blockchain. The secure distributed ledger technology behind Bitcoin, blockchain has exploded out of the realm of the dubious cryptocurrency into a hype-driven category of its own. VC money is pouring into numerous blockchain startups. is betting the farm on the technology . Pundits around the globe are calling for blockchain to reinvent everything from equities trading to charitable giving. And yet, aside from Bitcoin itself, real-world implementations of blockchain are few and far between. Has the hype exceeded the reality? Lets see what a number of skeptics have to say. Blockchain is a Solution Looking for a Problem As blockchain exploded from its cryptocurrency roots, it quickly took on new life, as proponents rushed to figure out what else it was good for. Blockchain is a solution looking for a problem is a sentiment that we heard several times while conducting this researcha fair representation of the reality, says Axel Pierron, founder and managing director of financial consulting firm Optimas LLC. Rather than investing in catch all blockchain-related initiatives, the industry should focus its attention on evaluating the various solutions that can address the issues that need to be solved. The Open Data Institute also warns about selecting the right tool for the job. We think that the government should go further and think about how it can convene sectors (such as finance, agriculture, or health care), identify common challenges in those sectors and then determine Continue reading >>

Illinois Issues Promising First Report On Blockchain In Government

Illinois Issues Promising First Report On Blockchain In Government

Illinois issues promising first report on blockchain in government The report identifies use cases and potential legislative proposals for deploying the technology to improve existing government processes. Ryan Johnston is an editorial intern for Scoop News Group. Johnston contributes content to all SNGpublications. The State ofIllinois has released its first report about blockchain, just over a year after it first announced its intention to investigate the distributed ledger technology. The report, released on Jan. 31, is primarily accessible on the InterPlanetary File System ,a blockchain-based file storage system, as a nod to the task forces confidence in the utility of the growing technology. (The report is also available as a direct PDFdownload here .) The task force concluded that blockchain technology and its built-in encryption can facilitate highly-secure methods for interacting with government and keeping paperless records, increasing data accuracy and providing better cybersecurity protections for Illinois residents." The report continues: "Though the technology still needs refinement, government has an opportunity to help shape and adopt innovative solutions." Illinois has consistently been at the edge of technology innovation, especially in distributed ledger technology. In late 2016, a number of state and county agencies convened to create the Illinois Blockchain Initiative , a group with the stated goal of determining if this groundbreaking technology can be leveraged to create more efficient, integrated and trusted state services, while providing a welcoming environment for the blockchain community. The initiative published an RFI in late 2016 to gather public knowledge and insight about the technology and appointed Jennifer O Rourke, deputy director at Continue reading >>

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