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Blockchain Has Been Unblocked, Unchained And Broken

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  • Blockchain Has Been Unblocked, Unchained And Broken

    Blockchain promoters and enthusiasts continue to blithely stroll along the yellow blockchain road to the golden city where immutable distributed ledgers make decades-long technology problems fade away, like the wicked witch. None them publicly acknowledges or seems to notice the hurricanes and earthquakes that are increasing in frequency and intensity.

    In total, hackers have stolen nearly $2 billion worth of cryptocurrency since the beginning of 2017, mostly from exchanges, and that’s just what has been revealed publicly.

    That’s no big deal, I guess. I describe these little security problems here and here.

    Someone who’s technically sophisticated could argue, following the logic I described here, that the security problem wasn’t in Blockchain itself. The problem was in wallets and exchanges, which are software that sits “on top of” blockchain, making it easier to use. It’s the same kind of security breach that can happen with any software, and has little to do with the inherent security of the software itself, but is mostly due to the layers of software built on top. This is true! One does wonder why Blockchain is so wonderful, then, if in practical use, its supposed greater security is so easily circumvented.

    Is it really more secure than a regular DBMS, putting aside all those flaky higher layers of software? That’s what everyone involved declares. The most open and honest of the Blockchain-ista’s will grudgingly admit that a nearly impossible 51% attack could cause a bit of a problem with the heart of the system, the keep of the blockchain castle.

    Sadly, the nearly impossible attack has happened. And not with some obscure little crypto-currency no one has ever heard of, but with Ethereum Classic, one of the premier systems, and the home of that transformative invention, the Smart Contract.

    An attacker had somehow gained control of more than half of the network’s computing power and was using it to rewrite the transaction history. That made it possible to spend the same cryptocurrency more than once—known as “double spends.” The attacker was spotted pulling this off to the tune of $1.1 million.

    To anyone with a shred of common sense, this is a fatal event. It demonstrates that Blockchain’s security has a fatal flaw, even when running in its optimal environment, with public miners.

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