DARPA makes another hole in blockchain’s ‘decentralization’ claim

The crypto winter is in full effect, and despite propaganda such as the “Long Live Crypto” ad from CoinBase, the blockchain looks more fallible than ever – especially when it comes to the efficiency of technology in offering a decentralized alternative to traditional financial systems.

In a new analysis, the Defense Advanced Research Projects Agency (DARPA), in conjunction with Trail of Bits – a cybersecurity research firm that consults for Big Tech players such as Facebook and Google – analyzed the agency on blockchain technology, which serves as the underlying transaction book. for both Bitcoin and over 10,000 other cryptocurrencies, is as decentralized as its largest proponents suggest.

The results are … well, here are some highlights:

• Four mining basins (collectives that consolidate mining power) account for 51 percent of total Bitcoin mining activity, with two mining basins doing the same for Ethereum.
• 60 percent of Bitcoin traffic is limited to just three ISPs
• About 4.5 percent of bitcoin owners control as much as 85 percent of the entire bitcoin pool

All for one and one for all? – The report highlights the range of centralization sources available in blockchain technology, and it reiterates some points from a study published earlier this month.

The key to this analysis, conducted by a handful of Texas universities, was that the blockchain network is vulnerable and a stronger degree of power is concentrated in a smaller subsection of users.

Even for a blockchain network as large as Bitcoins, there is still a small subgroup of privileged entities that can theoretically rewrite previous transactions, giving weight to the balance of power in the system. Tor is also important for the entire ecosystem, as it accounts for 55 percent of the Bitcoin nodes, making it the largest network provider for the cryptocurrency. Any compromise of the anonymous browser may have far-reaching negative consequences.

This report delves deeper into some of the decentralization myths surrounding crypto, so I would recommend reading it if you are interested. When Bitcoin was first created, the idea of ​​a democratizing, self-sustaining digital currency was new. Naturally, we return to reality, which in this case seems to bring the blockchain further away from a breakthrough, and closer to the same, old existing media for money exchange.