Last year, Bitcoin took the cryptocurrency world by storm, Â with its value skyrocketing to as high as $20,000 during one point. However, since then, its value has witnessed a downward trend, with no major spike recorded in recent months.
A recent report from the Bank for International Settlements (BIS) has put the cryptocurrency boom in unflattering terms. According to BIS, any further growth of digital currencies could break the internet as we know it.
The Bank released a detailed and highly critical 24-page report on the crypto boom and indicated that the digital currency is less “trustworthy” as compared to sovereign currency.
BIS Report
The report issued several warnings about the storage capacity and processing capabilities of the devices that run transactions involving Bitcoins. Assuming that there is a complete switch towards the digital currency, the report has this to say regarding the storage capacity of devices that keep a record of Bitcoin transactions:
The size of the ledger would swell well beyond the storage capacity of a typical smartphone in a matter of days, beyond that of a typical personal computer in a matter of weeks and beyond that of servers in a matter of months.
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It further talks about the processing capabilities of those devices as well, saying that “only supercomputers could keep up with verification of the incoming transactions.” The report warns that:
The associated communication volumes could bring the internet to a halt.
The report questioned the authenticity and level of trust put in digital currency. It states:
In mainstream payment systems, once an individual payment makes its way through the national payment system and ultimately through the central bank books, it cannot be revoked. In contrast, permissionless cryptocurrencies cannot guarantee the finality of individual payment.
The Bank told that the stability of these currencies can’t be guaranteed as well as there is no central issuing authority. It also pointed out the fact that how cryptocurrencies potentially shield their customers involved in activities like money-laundering and financing of terrorism. The report also hinted at the ‘environmental disaster’ saying that the crytpo transactions consume too much electricity and are vulnerable to manipulation.
WOW. A bank telling us about limitation of IT.
Refute their claims if you are so much an expert. Only 1 justification is enough to ditch this stupid blue-whale; electricity consumption which is soon to be 0.5% of world’s electricity. It is a notorious waste of precious resource without any benefits instead contributing more to global warming. This must be banned immediately. What these computers are doing? Just solving stupid puzzles set by the blockchain. These puzzles are not some scientific problems but just like soduko puzzles set by system to run this ponzi scheme.
Enlighten me if I am incorrect.
Actually the report is claiming “The associated communication volumes could bring the internet to a halt.” But fail to show how exactly it will bring it to a halt?
Regarding dagger size, the author of this report is absolutely clueless. Lite clients do not need to hold complete ledgers. Even for Full node clients there are many many proposals to show how ledger size can be reduced.
As for “In mainstream payment systems, once an individual payment makes its way through the national payment system and ultimately through the central bank books, it cannot be revoked. In contrast, permissionless cryptocurrencies cannot guarantee the finality of individual payment.” – This statement is absolute bonkers. Ask all the financial institutions who are working with Ripple to settle international payments.
This report is published by a Bank. The entire cryptosystem threatens the fundamentals of conventional banking system. What else you expect from them.
As for electricity usage, although it seems bad, is NOT the reason due to which this system can or will be “ditched”.
There are more than one algorithms in blockchain. Proof of work is the one that uses the miners to solve problem. But there are others that do not require mining. It is similar to car vehical industry. There are petrol vehicles, electric vehicles and bicycles. Before commenting again keep in mind that you own an automobile that is harming environment more than the cryptocurrencies.
lol you got it right! you dont need knowledge about how blockchain works and what are the advantages of distributed ledger over conventional banking and role of miners in network stability and authenticity to comment about bitcoin. because its a ponzi and you are a ducking GENIUS!!!
I think you are salty because you didn’t make money
This not a ponzi scheme. This report was published by a Bank what do you expect. When sending money to someone you can easily send it with fee being 40 cents whereas with bank they charge you a lot of money
Why can’t you guys stop posting things you don’t know about? You are actually critisizing a technology by showing an analysis of a product based on the technology. The report is about bitcoin and not about the cryptocurrencies.
Stop spreading wrong information.
I don’t think that Is a factor as there will allways be a way to minize the size when it becomes an issue . Maybe it won’t need to carry all it’s histry transactions around if there is a will, there is a way, maybe just carry the last ten transactions history will make it even more anonimous :)