Researchers: cryptocurrencies need governance to be reliable

Researchers: cryptocurrencies need governance to be reliable

Participants in cryptocurrency networks, such as Bitcoin, need to be better at anticipating beneficial software changes. This will ensure the security and privacy of the addresses and transactions, and will help preserve the value of cryptocurrencies.

That's what said  Benjamin Trump _ ORISE Fellow, United States Army Corps of Engineers _ , who is the lead author of a study published in the Springer's journal 'Environment Systems and Decisions', which analyzed the governance challenges of multiple cryptocurrencies, and explained why such challenges threaten the long-term usefulness of such digital assets.  

In the study, Trump and his team reviewed the state of cryptocurrency "forks" by looking at more than 800 publicly acknowledged occurrences of so-called soft forks, source code forks (altcoins), as well as hard forks from Bitcoin. The researchers used sources such as the Map of Coins and the Bitcoin Exchange Guide.

This analysis showed a substantial growth in the number of separate Blockchains, derived from the initial Bitcoin software. Many of these forks didn't survive beyond a few months, while others such as Litecoin, Dogecoin and Vertcoin have lasted for years.

Experts predict that hard bifurcations would become more common, with projections of up to 508 of those events in 2018 alone.

"Hard forks are a threat to maintaining a stable and predictable operating platform that is essential if cryptocurrencies are to be adopted for daily financial transactions," says Trump, who sees in such increases in hard forks a hurdle to mainstream adoption of cryptocurrencies.

Although the underlying technology driving cryptocurrencies (Blockchain) is promising, Trump believes that the stability of digital coins is threatened by the current processes which enable software updates.

Disruption or splits in the Blockchain of a cryptocurrency (fork) might cause people to completely lose the already feeble confidence in the crypto sphere _ due to the volatility in market prices _ and their ability to survive as a reliable vehicle for exchange.

Trump believes that if cryptocurrencies are to become a more globally recognized, reliable, and a predictable medium of exchange on an international scale, crypto miners, e-Wallet developers, Exchange operators and others interested in the ecosystem of the digital economy, need to generate more stability through good governance.


By Alejandro Cortés

  • Alejandro Cortés

    Alejandro Cortés

    Egresado de la Escuela Mexicana de Periodismo Carlos Septién García. Ha trabajado para varios periódicos en México y los Estados Unidos desde 2002.

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