In an interview, Ryan Taylor, the CEO of DASH, recently addressed the security of the Bitcoin [BTC] blockchain. He claimed that while Bitcoin is a secure platform for the recipient making a transaction through blockchain, it falls short in ensuring security for consumers.
He said that once the payment is made by customers, in case of failed delivery of goods or services, there is no recourse they can look to. While security is ensured for merchants, it is where security is least important on the switching incentives. Taylor went on to say that consumers are also required to pay in order to use this technology, unlike credit cards, wherein consumers are repaid using cash back, rewards and other such offers.
Taylor said that DASH is working to enhance cryptocurrency transactions on all aspects possible, whether it is for consumers or merchants. He also stated that DASH aims to adopt facts that will be applicable to any new payment method, specific to cryptocurrency. Taylor said in an interview with Cointelegraph:
“So for DASH, we’re focused on a lot on the ones that are applicable to any new payment method because we really don’t think that the first generation cryptocurrencies nailed those and they could be done in a much better way. I think that the first generation cryptocurrencies were designed by computer scientists and you know cryptographers and people that understand the tech, but they didn’t necessarily understand the payment space. So by taking payments industry best practices and applying them. We think that we can have a much greater impact.”
It is this “payment space” that Taylor thinks the first generation cryptocurrency, Bitcoin, lacks knowledge about.
Blockchain and Bitcoin
Blockchain technology is built on the idea where people can share valuable data in a tamper-proof manner. Blockchains store data in a complex system that involves mathematics and numerous software rules that makes hacking and data manipulation extremely tough.
Under Bitcoin’s blockchain, all of the’ shared data’ acts as a history of every Bitcoin transaction ever made. In other words, it is an ‘accounting ledger’. The ledger is then stored in multiple copies on a network of computers, called ‘nodes’. Each time there is a transaction submission to the ledger, the nodes check to make sure the transaction is valid. The validity is ensured by checking that the user spending a Bitcoin, actually had that Bitcoin to spend.
A subset of nodes compete in packaging valid transactions into blocks and adding them to existing chains. The owners of these nodes are referred to as ‘miners’. They earn Bitcoins by adding new blocks to the chain.
Blockchain and Bitcoin security
Theoretically, this system is absolutely tamper-proof. The cryptographic fingerprint that is unique to each block is one reason why. This fingerprint is called a ‘hash’. Another is the consensus protocol whereby all nodes in the network agree on a shared history, as in, they have updated their copies of the blockchain once a new block is added, after verifying that the hash matches its block.
The hash requires a great amount of computing time and energy to be generated. This serves as proof that the miner who added the block to the blockchain did the computational work to earn a Bitcoin reward. This is referred to as “proof-of-work.” This also acts as an adhesive since altering the block would require generating a new hash.
Another security element is that the hashes are also links on the blockchain, wherein each block includes the unique hash of the previous block. Therefore, in order for any changes to be made in an entry in the ledger, a new hash needs to be calculated not just for the block it is in, but for every subsequent block as well.
This process also needs to be done fast so that it does not affect other nodes adding new blocks to the chain. Even if one has more computing power than all of the nodes combined, success is not guaranteed. Any blocks they add will be in conflict with existing ones, and the other nodes will automatically reject the alterations made.
Although Bitcoin functions on first generation blockchain technology, its hash security and the huge number of nodes, and the interdependency of the whole security system, in general, makes it as theoretically immutable as one can imagine.