Risk and instability are two terms that are often associated with the cryptocurrency ecosystem. The security of Bitcoin [BTC] has often been under the spotlight as over the years, various incidents such as the Mt. Gox episode and the Cryptopia hack have all raised serious questions about the coin’s dependability.
The Bitcoin blockchain recently completed a decade in function, and Dan Hedl, Co-founder of ZeroBlock and the first Product Manager of Blockchain, recently put forward an argument to explain the security aspect of Bitcoin and its current status.
Dan Hedl highlighted a part of Bitcoin’s whitepaper where Satoshi had mentioned that it was not an entity that could act as a Federal Reserve and could mediate the money supply, since the general population would keep growing.
He suggested that Satoshi wanted to introduce a system where human decision-making could be removed from the process. He added that every time there was a change initiated in terms of monetary supply, people found a way to meddle with its core, eventually nullifying its function. Hence, Bitcoin’s long-term focus was based on stability and transparency.
Hedl mentioned that with time, Bitcoin prices keep rising. With the rise in price, block reward would also increase and it would create an influx of potential revenue. When the hash rate of the cryptocurrency so increases, it would become extremely expensive to launch a 51 percent attack.
In its early stages, Bitcoin [BTC] was susceptible to hacks and attacks. However, over time, it has become more and more difficult due to increased mining difficulty after every Bitcoin [BTC] halving.
“Critics often argue that transaction fees alone won’t provide adequate security. The short answer is that we don’t know. It’s subjective since the number of confirmations one would wait for depends on the transaction size and health of the network.”
Hedl concluded by stating that presently, a 51% attack wouldn’t really effect Bitcoin as it was still next to impossible to reverse historical transactions with ease.
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