The world of crypto assets is a utopian playground where coders, developers, and futurists are imagining downright revolutionary technological concepts. With smart contract platforms, digitization of identity and assets, supply chain tracking, and more, it’s no secret where the world’s next industrial revolution will come from. Blockchain will unleash the true potential of the Internet. Global cybersecurity spending in 2017 amounted to over 90 billion dollars, according to a research study conducted by Gartner Inc., and that’s not including the impact of fraud and cyber attacks on the global economy — which some infer could be in the magnitude of trillions.
Those losses are not only time consuming and costly, they threaten confidence in the systems we are supposed to trust, a mindset that affects our willingness to participate in the Internet economy. In short, the most pressing issue we face moving forward into the next era of digital connectivity is security. Although many crypto assets have found ways to improve upon some of the perceived shortcomings of Bitcoin as a technology — increasing speed, programmability, and enterprise capabilities — the fact of the matter is that none of these improvements has created a blockchain whose security is better than Bitcoin’s.
In fact, many of these blockchains have traded off their security for improvements in other metrics. Speed is often at the expense of centralization while security is often at the expense of scalability. Still, developers and cryptocurrency enthusiasts target Bitcoin’s energy expenditure and scaling issues as damning hindrances to successful mainstream adoption, when in reality, these are two vital features that keep Bitcoin the most robust and secure crypto asset in the world.
While there’s no guarantee Bitcoin will be the blockchain of choice moving forward in this paradigm shift, it cannot be ignored that in Bitcoin’s nine years of existence, it has proven to bring forth an unhackable and immutable protocol, a true testament to its resiliency and further proof that society should feel comfortable building on top of its infrastructure. Bitcoin’s extrinsic energy expenditure and proof-of-work consensus still make Bitcoin the most secure crypto asset. Bitcoin turns electricity into security — security by design, security from the ground-up, security as a requisite for the entire system to function.
And though not every crypto asset pales in comparison to the security of Bitcoin, most blue-chip projects have had instances of major security flaws, loss of user funds, or both. Even Ethereum, which is certainly a technological tour-de-force in its own right, will never be able to tout its security as being on-par with that of Bitcoin’s.
One of the first smart contracts to ever run on Ethereum had a loophole in the code that allowed an individual to steal funds entirely within the rules of the smart contract. Perhaps the protocol itself isn’t to blame, but when Ethereum touts itself as being a system where “code is king,” it lends itself for opportunities like this to happen. And when Ethereum’s aim is smart contracts, and then the very smart contracts it exalts get exploited rather easily, it doesn’t breed high levels of confidence. As such, the concept of a Turing-complete, code as law approach is not as safe as many once thought. Hard forking as a remedy is a unilaterally dangerous precedent to set.
This is not meant to detract from the potential of Ethereum, however. Rather, it’s to help debunk the criticism that Bitcoin’s slow pace of development is an indication of its shortcomings as a system. Fast-paced development brings speed, but it also brings an increased risk of unpredictable consequences. As smart contracts grow smarter and their implementations on Ethereum’s network become more robust, its true potential will materialize. This goes for any cryptoasset platform whether it be EOS, NEO, Cardano, VeChain, and more.
Charlie Shrem is a Bitcoin pioneer, a social economist and digital currency trader. His work in this field is legendary. In 2011, at the dawn of the crypto era, he founded BitInstant, the first and largest Bitcoin company. In 2013, he founded the Bitcoin Foundation and serve as its vice chairman. Since then, Charlie has advised more than a dozen digital currency companies, launched and managed numerous partnerships between crypto and non-crypto companies, and is the go-to guy for some of the world’s wealthiest entrepreneurs. In short, he is the ultimate insider at the epicenter of the crypto universe.
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