fbpx

AIBC

The Pentagon: “Blockchain isn’t decentralized, is vulnerable and outdated”

Posted:: Jul 04, 2022 12:13 Category: Americas , Blockchain , Regulatory , Posted by Kyle

A new report by the United States’ highest authority on defense and security, The Pentagon, is intensely critical on the emerging technology. The main criticisms include issues of centralization, outdated software and vulnerability to attacks.

The difficulties of Decentralization

The report “Are Blockchains Decentralised, Unintended Centralities in Distributed Ledgers”, has galvanized debate on Blockchain’s role in a number of industries with fintech, security, big tech being amongst the forefront of this growing concern. Possibly the most harsh finding of the report was that a number of actors within a supposedly decentralized Blockchain’s ecosystem are able to

“exert excessive and centralize control over the entire blockchain system.”

The Defense Advanced Research Projects Agency (DARPA), the Pentagon’s research arm, contacted Trail of Bits to investigate Blockchains such as Bitcoin and Ethereum during the course of this aforementioned study. The security research organization found that only four entities in Bitcoin and two entities in Ethereum are required to disrupt their respective ecosystems. Moreover, 60% of all Bitcoin traffic moves through only three ISPs with the organization making note of outdated and unencrypted software and protocols in use.

The Trail of Bits report stated that “the safety of a blockchain depends on the security of the software and protocols of its off-chain governance or consensus mechanisms.” The researchers also studied third-parties vital to their respective ecosystems such as mining pool sites with shocking results.

“ViaBTC, a leading global mining pool, assigns the password “123” to its accounts. Pooling, another mining organization, does not even validate credentials at all, and Slushpool—which has mined more than 1.2 million Bitcoin since 2010—instructs users to ignore the password field. Combined, these three mining pools account for about 25% of the Bitcoin hash rate, or total computer power.”

“Decentralized” Blockchain: Harsh criticism or valid points?

The report also noted some inherent issues in the decentralized superstructure of Blockchains such as Bitcoin with the concluding statements noting that

“The majority of Bitcoin nodes have significant incentives to behave dishonestly, and in fact, there is no known way to create any permission-less blockchain that is impervious to malicious nodes without having a TTP.”

This critique comes at a vital time in the evolution of the ecosystem. On one hand, the rise of Crypto Winter brought forth by the collapse of Terra-Luna and the Celsius Network have placed the nascent industry under unprecedented amounts of pressure and criticism. On the other, some of the largest institutional investors, respected advisory firms, Venture Capital groups and Big Tech giants are delving headfirst into the industry and its related aspects such as the Metaverse. With concerns on how genuine “decentralization” might be easier said than done, only time will tell how this report will effect the industry down the line.

Join us in Belgrade, Serbia from the 22-25th August:

With the peninsula being known for its natural beauty, rich cultural landscape and fantastic delicacies, the Balkans are renowned for having some of the most quintessentially Mediterranean vistas and experiences. From the Adriatic coastline of Split to the fairytale-esque castle of Lake Bled, the region has a lot to offer the world. This being said, something that fewer may know is the fact that the nations of the Balkans are incubating a nascent but powerfully growing technical expertise when it comes to frontier technology such as Blockchain, AI and more. Therefore the region may not only be a rich adventure into the past but my also serve as a window into the very near future.

Join us in Belgrade for the best the industry has to offer and for a window into the future of Deep Tech. To learn more about sponsorship and speaking opportunities or to inquire about attending the event, please contact Sophie at [email protected]

Related Posts

Quantum AI: When Deep Tech…

Artificial intelligence is set to possibly be the most disruptive technology of our age. The ability to create intelligent and,…

How to submit a Crypto-Exchange…

SALVUS Funds is a boutique advisory firm based in Cyprus offering investment firms, funds, Electronic Money Institutions (EMI), and Crypto-Asset…

AI eyes on the sky:…

Constituted by the Sternberg astronomical institute, Laboratoire de Physique de Clermont, Space Research Institute, Moscow Institute of Physics and Technology…