Structural Advantages Of Blockchain Technology

Decent Essays

SECTION: WHY IT MATTERS • STRUCTURAL ADVANTAGES OF BLOCKCHAIN TECHNOLOGY • IMPLICATIONS OF STRUCTURAL ADVANTAGES • POTENTIAL APPLICATIONS OF BLOCKCHAIN TECHNOLOGY STRUCTURAL ADVANTAGES OF BLOCKCHAIN TECHNOLOGY DURABILITY—Blockchain technology operates on a decentralized network of computers as opposed to a central server or network of servers. Without a central point of failure, distributed ledgers are significantly more durable than today’s centralized methods and better able to withstand anything from malicious network attacks to power outages. Depending on the consensus method employed by a specific blockchain, a successful attack would require the attacker to either control more than 50% of the computing power in the network (proof-of-work consensus method), or to own substantially more than half of the assets/tokens on the ledger (proof-of-stake consensus method). Neither of these is economically sound. For example, in a proof-of-work method, for an attacker to control over half the computing power on a well-scaled blockchain today would require vast computing resources—the key here is that the cost of infiltrating the network increases faster than the incentive to do so (verify this, it’s possible that they actually increase in a parallel fashion). For blockchains that rely on the proof-of-stake consensus method, anyone owning more than half the assets on the network wouldn’t be incentivized to compromise its integrity. It would be the

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