scorecardresearchMost crypto tokens do not have decentralised blockchain networks, say experts

Most crypto tokens do not have decentralised blockchain networks, say experts

Updated: 17 May 2022, 11:18 AM IST
TL;DR.
Most new age crypto companies are opting for quick scalability over decentralisation and security.
Besides Bitcoin and Ethereum, none of the crypto tokens are running on decentralised blockchain.

Besides Bitcoin and Ethereum, none of the crypto tokens are running on decentralised blockchain.

Terra temporarily halted its blockchain network last week, when its crypto token Luna and UST stable coin started crashing. Since last year similar outages were seen in Solana’s network, reported Business Line.

Such incidents pose a question on whether crypto’s blockchain technology is actually decentralised. Industry experts said apart from Bitcoin and Ethereum none of the crypto tokens are really running on decentralised blockchain.

Most new age crypto companies are opting for quick scalability over decentralisation and security. Adhering to such strategy also leaves the blockchain network of these companies vulnerable to network attacks and decentralised finance (DeFi) hacks, BL reported.

“Blockchain has the capability to operate in a completely decentralised way but that doesn’t mean blockchain always is decentralised. So if all the computers and nodes connected are run by one company, it is pretty much centralised. In the case of Terra, they were running the required blockchain and obviously had some sort of management switches in place where they could turn it on and off. This is definitely not like Bitcoin, where the network is completely decentralised. When things went south, they decided to halt blockchain to bring stability,” Sathvik Vishwanath, Co­founder and CEO of Unocoin said.

Ethereum founder Vitalik Buterin came up with the Scalability Trilemma, where he says principally one could pick only two from scale, security and decentralisation to build a blockchain network, Sharat Chandra, VP­ Research & Strategy, EarthID, said, reported Business Line

Decentralised networks “While Bitcoin and Ethereum have the most decentralised blockchain networks. All other new age blockchains have chosen scalability over decentralisation, which could lead to possible network attacks, DeFi hacks and thefts.

First Published: 17 May 2022, 11:18 AM IST