Author: Alex Mizrahi 2014-04-23 22:06:48
Published on: 2014-04-23T22:06:48+00:00
The idea that blockchain technology is flawed and we should revert to trusting third parties is not accurate. Each approach has its own trade-offs and areas of applicability, such as proof-of-work (PoW) having advantages like neutrality, censorship-resistance, and high security, but taking time for transactions to become irreversible. In contrast, trusted third parties (TTPs) can be very efficient but lack the aforementioned benefits. Hybrid systems can combine different approaches to reap the benefits of both, with PoW-based blockchains used for settlements and large transactions and TTP-based payment systems used for small-value transactions like buying coffee. This would address scalability problems and remove the need to make PoW-based systems more complex for real-time transactions, which would weaken PoW's advantages without providing hard guarantees and undermine alternative solutions.
Updated on: 2023-06-08T20:46:47.046150+00:00