Is cryptocurrency ready for attack?
At this moment, it is questionable whether it could withstand a full onslaught from Wall Street if colluded to wipe out cryptocurrency. Naturally, this would never happen since Wall Street firms are already immersing themselves in this realm. Thus, while some might attack, others will defend.
However, this is the same situation we see exhibited on a regular basis today. Cryptocurrency is changing the world, hence it is up to us to design something that cannot be attacked. Bitcoin started the process and, from what we can see, it looks like it is able to take on all comers.
After more than a decade in the wild, Bitcoin keeps chugging along. With each increase in hashrate, that system gets a bit more resilient. That is key.
Ultimately, resiliency should be a natural part of cryptocurrency since decentralization provides that. The fact there are attack vectors shows we have a lot of work to do.
It is well known that centralized system are more efficient, at least in the short term. This makes sense because when you have a top-down system, decisions can be made by a smaller group of people. Plus, the tighter control allows for things to get done in a more rapid fashion.
Decentralized systems are much slower. They tend to be clunkier especially in the early days. Without the centralized planning, the inefficiency really shows through.
What is provided, however, is resiliency. When we operate with decentralization, the structure tends to go horizontal. This is where attack vectors start to diminish. It is a situation that is compounded when open source software is part of the equation. Here we can see the ability to spin up multiple front ends, all tapping into the same data.
Therefore, it is in the industry's best interest to start decentralizing by distributing power. Hierarchical, top-down system are fragile. They can be toppled in many ways. This is something we need to prevent.
Resiliency comes from innovation. Over time, those companies that keep expanding into new markets and creating new products or services succeed. The proverbial one trick ponies tend to get washed away, especially when technology makes them obsolete.
With cryptocurrency, we certainly adopt the bottom up approach to innovation. This is a powerful mechanism that should not be overlooked. With decentralized system, anyone with an idea can bring it to market and test it out. Since things do not require permission, it is simply a matter of opening it up to the wild.
After that, it is up to the market participants to decide what is embraced.
Nevertheless, the net result is a great deal of advancement. Due to the amount of creativity being applied, decentralized systems tend to surpass those which are centralized. The challenge for the latter is size ultimately becomes inefficient. There comes a point where the advantages centralized entities has becomes a liability.
Here is where decentralized systems can overtake them.
It is survival of the fittest: the weak truly die off.
Decentralized Finance (DeFi) is going to take over the world. Here we see a prime example of some of the largest companies in the world that are coming under attack. There are trillions of dollars at stake and we need to be prepared for battle.
Not only can DeFi be more efficient at providing the services the traditional financial does, it will also innovate at a quicker pace. The fact it removes layers of friction in the transfer of money as well as other vital services, is a major starting point.
As we distribute financial activity over a wider array of applications, the points of vulnerability diminish. Many ask why do we need so many blockchains and cryptocurrencies? The obvious answer is resiliency.
We know much of it will not carry a great deal of value. In fact, the majority of projects will fail. However, the same principle of decentralized innovation applies here. Essentially, the industry is strengthened the more that is put out on the open market.
DeFi will spread to almost every website. By tokenizing, it allows for people to enter the financial realm. When the coins/tokens gain further distribution, that makes them more resilient.
This only adds to the entire system.
Of course, at the core of this is utility. Without that, not much can take place. We see this in operation now where we have a lot of stuff that basically does nothing. What can you use that token for? If there is no answer for this, it is vulnerable.
The benefit of Hive is that it follows this pattern. There is no company behind it or large stakeholders in control. Here we see a level of protection not afforded other cryptocurrency entities.
That said, it does mean our approach is very convoluted. In other words, we are all over the place. Nevertheless, we are starting to see a resiliency to Hive that doesn't exist in a lot of other places within cryptocurrency.
Due to token distribution along with the decentralization of nodes, Hive is at a fine point. This is not to say that we achieved anything because this is an ongoing process. Nevertheless, each new wallet that powers up some HIVE tends to change the governance model slightly.
For its size, there are a number of applications being worked upon with some potential. This is where we can see how things could change. The fact that Hive excels at account management will make it an attractive system to tap into. While others are still dealing with difficulty in this area, Hive already solved it.
In the end, those ecosystem that have a large degree of decentralization and distribution will fare well. Here is where we see the foundation for cryptocurrency since, without it, attack vectors are evident.
The task now is to just keep building and moving in this direction. That should be the goal for the entire industry.
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