Problems of Blockchain

The first version of anything, rarely has massive success, does anyone remember what was the first Internet Search Engine before Google? Crypto technology is no exception.

The problems of crypto technology could be divided into two types: purely technological problems and problems due to the scope of their applications. This last group can be divided into the economic, social and political spheres.

Technological Problems:

Perhaps you have already heard that Bitcoin consumes too much electrical energy and that it is used by criminals. These issues affect the image of all crypto networks and certainly prevent mass adoption; But it is not these problems that have prevented the widespread spread of Bitcoin and other Blockchain networks among users in daily life, but rather large technical problems.

The first big problem of Blockchain was exposed by the Ethereum developer, Vitalik Buterin, and he called it “The Blockchain Trilemma” and the explanation is too long, but in summary it says that no Blockchain cryptocurrency can be totally decentralized, totally secure and totally scalable. at the same time. One of these three characteristics must be sacrificed.

The other problem with Blockchain networks is that theoretically they have a Peer-to-Peer type network architecture: The big difference from the traditional centralized networks of the Internet, which are networks with a "client-server" type architecture, is that, while in the client-server networks only the "servers" keep the entire database and the "clients" are the users who access it, in peer-to-peer networks each user is a server at the same time and this implies that all Users must have an up-to-date copy of the transaction database (or ledger), which will be infinitely growing. That is simply not possible because devices with infinite memory would be needed.

The two most popular solutions to these problems beat the original meaning of cryptocurrencies and are wallets and second layers: Wallets and second layers/sidechains.

Why do wallets beat the original purpose of crypto?

Thanks to wallets, users can interact with a crypto network without having a copy of the entire ledger on their device. The original idea of Bitcoin was to get the middlemen out of the way, and this was reflected in a phrase that was popular in the early days of bitcoin and was “Don't trust. Verify”, that meant that the user would use his own copy of the transaction ledger to verify that a Bitcoin had not been paid twice by a holder. Today there are about 106 million Bitcoin holders and only about 15 k Peer-to-peer nodes. This means that 99.99% of Bitcoin users must trust that these nodes make valid verifications of the transactions. This makes them intermediaries to be trusted.

Some second layers beat the original purpose of crypto?

Bitcoin Lightning Network is simply a middlemen network that fund and verify transactions for the rest of users.

Other problems of second layers

"Stuck" transactions are already a problem in crypto if there is no anyone to ask help to. Add to that a "bridge" to a second layer and the user is defenseless against technical errors and bad configurations. No one would systematically take a step beyond for accountability. Failed transactions and lost funds are much more frequent with the use of second layers.

All the problems mentioned above add to poor usability.

Users don't really care about the technology behind an application. What users want is to do their online activities. That's why the only really popular application of crypto is trading inside centralized exchanges. No P2P nodes or second layer bridges to be configured, and if something goes wrong there's always someone to complaint with.

Tangle: A root-cause solution.

To create a completely new technology, different to blockchain can be an approach that has better possibilities. Besides that, Tangle takes advantage of all the lessons-learned in more than a decade of existence of Blockchain. Its time for a new crypto technology.