The fundamental flaw in cryptocurrencies creation is basically the uncontrolled network of computers and the imitators that contribute to high electricity consumption.
On their 24-page article which was released on Sunday, the Bank report that bitcoin and their mimic coins are suffering from a “range of shortcomings”. Those shortcomings will probably prevent cryptos to achieve their high expectations that have been created from the spark of interest last year.
The uncontrollable consumption of electricity and internet bandwidth by crypto miners may bring the internet down and may end up as an environmental disaster.
One major find in the BIS report is the analysis that the blockchain technology will need a robust software to handle the enormous transactions on a national scale. As the size of the ledgers keeps growing, probably, in the end, will overwhelm everything from individual smartphones to servers.
Base on the report: “The associated communication volumes could bring the Internet to a halt”
A very interesting statement by researchers said that bitcoin miners are the major electricity consumers and those miners are consuming about the same amount as Switzerland does.
They Said: “Put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster”
On the other hand, hackers took the opportunity on the incomplete infrastructure of the crypto exchanges and they are hacking them regularly. For example, last week bitcoin fell after a South Korean exchange reported that they have been hacked.
Bitcoin fell about 0.9% to the level of $6.439 on Monday.
The BIS also stated some of blockchain technology advantages by saying that the technology offers quick cross-border payments with more efficient way.
They also stated that the technology offers faster transactions between the sender and the receiver with ease of an email that may be also the weak spot of the technology due to the risks on a number of factors to try and run a massive global economy with no center to control it.
The report concluded: “Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded.”
This article was originally posted on FX Empire
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