Cryptocurrency

These are the main challenges that have the cryptocurrencies to Vitalik Buterin

Five years after publishing his article “Problems,” which gave an overview of the main difficulties facing the economy of the cryptocurrencies in 2014, the co-founder of Ethereum, Vitalik Buterin, published an update of their work in which brought together again the 16 aspects that show progress, and other tasks within the world of cryptocurrencies.The developer shared his views in an article entitled “challenging Problems in criptomoneda: five years later” in which he broke down, in three sections, his reflections up to date at 2019. For Buterin challenges are largely focused on problems in cryptography, problems of the theory of consensus and the economic sciences. In addition, in a section suggests 10 new problems that relate to the past, the present and the future of the ecosystem of the cryptocurrencies.The problem number 1 of the cryptocurrencies, to Buterin, is the scalability. Your concern is related to the blockchains of great size, and the confidence of its participants. On this point he noted: “if there are only a few entities capable of executing nodes to complete, these entities can conspire and agree among themselves, be given a large amount of bitcoins, and there would be no way for other users to see for themselves that a block is invalid, no processing themselves a complete block”.Buterin says that the problem is to create a design of blockchain that keep the guarantees of security similar to Bitcoin, but where the maximum size of the node more powerful is needed, to keep the network functional, to be substantially sub-linear in the number of transactions. About it referred that in the past five years there has been a lot of progress theorist on this point, but that is pending further evaluation in the real world.There are four other challenges to Buterin within the area of cryptography, including the timestamp, the test of arbitrary computer code, the obfuscation and cryptography-based hashes.

Problems of consensus

One of the challenges in the area of consensus is the Proof of Work (PoW) resistant to the miners ASIC. However, Buterin believes that the problem has been solved up to where it has been able to, and cited as an example the application of the algorithm to Ethash in the blockchain of Ethereum, this as a way of trying to counteract the mining digital with equipment of greater processing.”After three years and billions of dollars in rewards on blocks, the ASIC do exist, but they are, in the best of cases, 2-5 times more potent and cost-effective than the GPU (…) in the long term, the best option for consensus of the blockchain is a Proof of Share (PoS)”, wrote Buterin on what will be, in the future, the form of consensus within the network.The developer added three more challenges in this area: the Proof of useful Work, the same Proof of Participation and the so-called Storage Test that involves the bandwidth of the internet connections and the storage of the hard disks.

Challenges in the economic area

The update Buterin also covers the aspect of the economic sciences. The main problem, according to his criterion, is that of the price volatility of bitcoin. The challenge is to design a criptomoneda with a stable price. On this subject it points out that there is some progress and it mentions the arrival of MakerDAO as an asset collateral of the ETH, not to mention other stablecoins with more time in the market, such as tether (USDT).In this section, the developer stressed that the difficulties will also focus on the incentives of decentralized public goods, the reputation system, the Test of Excellence, systems anti-Sybil, metrics of contribution of decentralized and metrics of success on a decentralized basis.It is important to comment that the analysis of Buterin is performed, in certain aspects, from the perspective of the blockchain of Ethereum, its main project in the ecosystem, comparing some elements with the network of Bitcoin. Despite the advances that have been achieved, the controller is of the that believes that there are new problems, such as mechanisms of governance, decentralized reputation systems and human identities are unique, among other challenges.To review the article published in the 2014 to 2019, we observed marked differences in the progress that has been experienced in the world of cryptocurrencies. Something that is reflected in the valuation Buterin gives the 16 elements considered in which virtually all evidence of progress from moderate to significant.