Why Security Has Become a Major Talking Point for Blockchains
Originally published on: Why Security Has Become a Major Talking Point for Blockchains
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March 07, 2018
2017 was the year in which cryptocurrencies took off on a global scale. People across the globe began investing in them, and the increasing demand led bitcoin to an all-time high of $19,666 in December 2017. However, even though digital currencies may appear on the surface to be enjoying their glory days, a lot of internal conflicts are currently bogging down the technology.
Drawing Political Lines in Digital Sand
Opinion is principally divided among two groups of developers. One is defined by its desires to make the blockchain network more secure and robust to external threats. The other is pushing for bleeding-edge innovation at all costs.
Take, for instance, the core developers of bitcoin. Bitcoin, launched in 2009 by Satoshi Nakamoto, runs on the Proof Of Work (POW) consensus mechanism. The developers working on the network are wary of security threats and actively try to make the network immune to hacks.
On the other side of this argument, are those who take the more liberal approach. On July 20, 2015, the Ethereum genesis block was created by Vitalik Buterin, writer, and co-founder of Bitcoin Magazine.
The Ethereum community may seem distinct today, but there is no denying that they branched out from the first every cryptocurrency.
Bitcoin was popularly promoted as a decentralized global currency that would take banking to the unbanked.
With Ethereum, Buterin wanted to make that dream a reality, while also developing a platform where developers could create their own decentralized apps using the blockchain’s smart contract feature.
Put bluntly, the liberals of the crypto sphere promote adoption of more cutting-edge innovations and are open to items such as the lightning network, which is a second level payment protocol that verifies transactions off the main blockchain and depends on it only in case of a discrepancy or settlement.
Thus, it does not require all nodes in the network to verify the same transaction.
How to Balance Security with Improvement
While one group argues that the development will make the network faster by processing more transactions with lesser transfer fees, the other group opposes this by stating that efficiency must not come at the cost of security.
A special characteristic of the Lightning Network is that it can be used to open a peer to peer payment transfer channel without involving any other third party. While immediately tantalizing, upon further investigation, these new protocols are not without their pitfalls.
As secure as Buterin’s development has been, an unidentified attacker managed to drain the Ethereum-based DAO project of more than 3.6 million ether on June 18, 2017. The DAO attack took place due to a bug in the code and was concluded to not be due to a fault of the Ethereum blockchain. Nevertheless, the hack was sufficient to convince a bunch of developers that there was a need to make the blockchain more secure.
In an interview, Andreas Antonopoulos initially described the lofty, philosophical changes that have driven bitcoin’s development as our civilization’s attempts to “attempt to scale governance models to manage greater and greater numbers of people.”
“Presently, we use hierarchies that aggregate information up a bureaucratic structure, where decisions are made at the top and actions taken to the bottom. And for two centuries, this model has worked well to massively scale up human organization.”
It remains to be seen whether the two groups pushing for security and innovation will finally arrive at a compromise and work in unison.