Everybody seems to be getting frustrated over what appears to be an unending parade of hackings, DDoS attacks, thefts, fraud, exchange failures, security breaches, bankruptcies, service disruptions, asset freezes (not restricted to Russian officials) and other unsavory headlines that would make any serious crypto investor’s hair stand on end. And if we get a much needed respite and enjoy the latest on Bitcoin getting accepted at a local hardware store or deli, we are soon after woken up by news of arrests, seizures and governments in no rush to support cryptocurrency or discouraging its use outright.
Now, the straw that broke the camel’s back has been Vircurex’s freezing of withdrawals, adding salt to an old wound we thought was already healed. Nothing bad really happened this time, but the timing was just really, really bad.
The frustration can be observed in forums like reddit. In one colorfully worded post, the user writes:
“How many times are exchanges going to fail, keep going on a fractional system, duping all their users into depositing all their money, then freeze the funds 6 months later.
HOW THE **** does this keep happening. We have provably fair gambling sites. Why cant we have provably solvent trading sites? Can someone please invent this already?”
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Many are expecting better considering the millions that are being invested into Bitcoin startups, funds and technologies such as mining. Many were growing confident as some of the most talented developers have dedicated their time- and careers- to the project. Some big names have left well-established, highly-successful ventures to join the fold.
And yet it seems there has been little progress- some will say we’ve gone backwards when looking at our motion relative to the startling success of those misusing and abusing the technology.
A Happy Middle?
In a very fiat-like gesture, Stefan Thomas, CTO of Ripple Labs, performed an “audit” on Kraken “to verify that the total amount of bitcoins held by Kraken matches the amount required to cover an anonymized set of customer balances.” Perhaps such “centralized” initiatives can serve as a semi-automatic, semi-centralized approach to restoring stability while retaining independence.
However, one can view a lot of the progress thus far as a “blockchain” of bandage solutions to a technology which by its very definition, is compatible only with bandage solutions in order to remain truly faithful to its doctrine of decentralization. As of now, it looks more like a game of cat and mouse: a level (decentralized) playing field where security and its threats possess equal advantage, and advances by one are matched and surpassed by the other.
When viewed this way, it will cause those who are fed up with current crypto events long for fiat and peace of mind. Ultimately, the best of both worlds will have to be leveraged as part of a compromise for the next generation of money.