VULNERABILITIES OF THE BLOCKCHAIN MODEL

Warren Buffet might have been wrong when he said about cryptocurrency -

“Stay away from it. It’s a mirage, basically” — Warren Buffet

Still this doesn’t excuse the following quotes:

“The blockchain keeps everyone honest, and a whole layer of banking bureaucracy is removed, lowering costs.” — Paul Vigna

“Bitcoin totally strips away the State’s control over money.” — Roger Ver aka “Bitcoin Jesus” Voluntaryist

“Cryptography shifts the balance of power from those with a monopoly on violence to those who comprehend mathematics and security design.”

In light of recent developments, a little bit untrue, even ridiculous right? Of course Hindsight is 20/20. And now reality paints a different picture. Blockchain is quite imperfect. Many are still reeling from the recent MEW hack and now more than ever before, it’s time to discuss the many defects of blockchain

A few blockcahin related hacks in recent memory

1. Nicehash hack, Dec 2017 — Cryptocurrency amounting to $64 million Bitcoin is said to be stolen from cryptocurrency mining marketplace NiceHash, emptying its entire bitcoin wallet.
2. CoinDash ICO hack, July 2017 — CoinDash website was compromised merely 3 minutes after the sale started. The address for sending investments was changed to a fake address and investments were routed to the attacker’s account. Around $7.4 million Ethereum was stolen during this hack.
3. Krypton (KR) & Shift (SHF), Aug 2016 — Attackers targeted Ethereum-based Blockchains likes the cryptocurrencies, Krypton (KR) and Shift. The attackers were able to exploit the Blockchain with a two-step attack: overpowering the network with a 51% attack to ensure rollback on transactions and spending the coins twice; and employing DDoS nodes to enhance network power. The attack led to the loss of 21,465 KR, $3000 at the time.
4. Steemit, July 2016 — The Blockchain-based blogging platform, was hacked. Vulnerability on the Web browser front end and not on the cryptocurrency itself led to this attack. Around 250 user accounts were compromised, resulting in the loss $85,000 worth of Steem Dollars and cryptocurrency Steem.
5. The DAO, May 2016 — Blockchain based venture capital, The DAO — an Ethereum Project, was hacked for $60 million.

Problems of blockchain technology

1. (Universal) adoption — Blockchain would be great, if every market participant were using it. But it’s not difficult to see why everyone isn’t. Overthrowing the status quo which is what existing blockchain based digital currencies aim to do, isn’t easy. The current complex financial markets ecosystem won’t change overnight. It can’t.

2. Security (Wallets) — Wallets are not the safe vaults they are touted to be. The fact is value stored in your wallet can be stolen without a trace.

3. Transactions are irreversible — Read below, the answer found on a popular blockchain wallet blockchain.info about whether blockchain transactions can be reversed

“No, we’re unable to cancel or reverse your transaction.

Even many advanced cryptocurrency users can recall an incident when they failed to double-check their transaction details and they accidentally sent funds to the wrong recipient, or sent the wrong amount. As unfortunate as it is, cryptocurrency transactions on the Bitcoin, Ethereum, and Bitcoin Cash networks are designed to be irreversible and we have no control over them.

Knowing this, it’s extremely important to make sure your transaction details are correct before you click send.”

(Culled from blockchain)

We don’t know about you, but this doesn’t instill us with much confidence. Even traditional bank transactions make room for imperfection and malicious or error transactions can be reversed. Blockchain based digital currencies, as modern as it claims to be, fails to make room for this.

An Ingenious Solution

Introducing the Dice money Model.

The issues with current blockchain based digital currencies some of which have been earlier highlighted have led to a series of improvements which will now be a executed by a post-blockchain model — The Dice Money model.

Some of the unique advantages of this model includes:

Does not require a wallet (No wallet No problem)

Reversible transactions

It combines the advantages of traditional money and decentralized currency

Completely fee free while all parties are still incentivised

Ability to facilitate both electronic and hardcurrency (physical) representations of DICE

Combination of mining and investment will help draw miners that get disillusioned with the volatile nature of most current cryptocurrencies

New way for start-ups and businesses raising capital to create a strong community and a capital asset at the same time

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