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Breaking News / Cryptocoins / Ethereum

How PlasmaCash Can Prevent Hackers

PlasmaCash was created by Ethereum founder, Vitalik Buterin, and is a blockchain scaling system of smart contracts, designed to increase the Ethereum blockchain’s computational potential.

This new system was presented just last Friday, at the Ethereum community conference EthCC, which took place in Paris.

Plasma first hit the scene back in August last year, after Buterin teamed up with Joseph Poon, the co-creator of Lightning Network. It is a series of contracts that run on top of a root blockchain, and optimises any data that is passed onto the root blockchain, which in turn will reduce the transaction fees for both DApps and smart contracts.

This newest technology does not come without problems though, with the biggest being the scalability. Every single user on the network has to authenticate each different block, which essentially prevents any huge scaling. However; rather than having to download the entire Plasma history, users can generate Plasma coins  by sending deposits to the contract. Buterin says;

“A user actually only needs to verify the availability and correctness of the Plasma chain only at the specific index of the coin, of any coins that they own and any coins that they care about.”

They believe that this technology can actually make themselves more hack resistant, and are suggesting that cryptocurrency exchanges should use it. This is because every single Plasma coin actually has a separate owner, and they are not replaceable or interchangeable. This would mean that the owner of the coins could then prevent any fraudulent withdrawals. Buterin said;

“Regardless of what happens in the exchange, users can run their money through the Plasma exit procedure and get their money out.”

He also goes on to talk about another selling feature that makes PlasmaCash very appealing indeed, and this is that the exchanges could insure losses and gains through the contracts, saying;

“Hopefully when the next big multi-billion dollar exchange written by a totally incompetent developer gets hacked, no one will lose any money.”

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Frances is the head writer for Crypto Daily, and she is responsible for bringing you the latest news on everything that is related to the Crypto world. She has a keen interest in Cryptocurrencies, and has many years of experience writing in all different roles. She is incredibly passionate about writing, and this combined with her interest into the finance, and virtual currency sector means that you are kept up to date with all of the latest news and information regarding all cryptocurrencies.