Stephen Downes

Knowledge, Learning, Community

The first problem is scalability, which shows up immediately in the amount of time it takes to verify that a transaction is authentic. Visa performs 40K transactions per second, while Ethereum and Bitcoin are capable of between 7-15 per second. You see the issue. The energy cost is another factor, "currently around 180 million KWh for just 200,000 transactions." Again, you see the issue. A third issue centres around hacking; while the blockchain itself is secure, the systems around it might not be. This is how the recent Ethereum hack worked. Choice is also becoming an issue; "there are dozens of different networks you can employ, each with their own features and capabilities." Where is this headed? The article suggests (and it's hard to disagree) that we'll see more emphasis on private blockchains; "pragmatists understand that businesses need solutions that are both scalable and flexible to their needs, even if in being ‘permissioned’ they aren’t true to Bitcoin founder Satoshi Nakamoto’s original vision." Oh well, I guess I'll just go play with cryptokitties.

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Stephen Downes Stephen Downes, Casselman, Canada
stephen@downes.ca

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Last Updated: Mar 30, 2021 9:42 p.m.