Comparing Block Assurance Times for various cryptocurrencies

welcome everyone so today I wanted to
talk about the recent paper that IOHK
released Sebastien put it on his twitter
and the title of the paper is comparison
of block expectation time for various
consensus algorithms and i wanted to
talk about this paper in terms of proof
of work versus proof of stake so the
proof of work community proof of work is
something like Bitcoin or Ethereum
Ethereum is going to move to proof of
stake eventually but it right now it’s a
proof of work coin and proof of stake is
something like Cardano the proof of work
community often argues that proof of
work is more secure than proof of stake
and this has been proven to be untrue Ouroboros is just as provably
secure as a proof of work system
and this paper actually leads me to
believe that it may be actually more
secure than a proof of work system
because the time it takes to confirm
transactions is a lot quicker than in
the Bitcoin network or in the Ethereum Network so this paper compared Bitcoin,
Ethereum, and Cardano
so they could they compared Ouroboros
which is cardano’s protocol they
compared GHOST which is Ethereums
protocol and they compared bitcoins protocol one of the
things that I thought was very
interesting with this paper was this
idea of block confirmation times for
users to get assurance that their
transactions will not be reverted so
there’s this whole issue in
cryptocurrency called the double spend
problem so basically it means that you
are sending coins through the same
address or you’re spending the same money
twice so for example if you go to a car
dealership and you purchase a car and
you’re sitting with the dealer and
they’re like send me your Bitcoin to
this address and then the car is yours
but you have to wait for the
confirmation to be 99.9% clear as a car
salesman in order for that transaction
to go through without you feeling like
you’ve got shorted so the person
if they double spent the transactions within the network
basically what that means is
both transactions would appear in that
block but eventually when it’s time to
solve that block it would be kicked out
both transactions would be kicked out
they would be discarded because you
cannot double spend you cannot spend the
same money within the network so how do
cryptocurrencies combat this problem
they wait for confirmation times so this
paper analyzed the amount of time that
you would have to wait to be 99.9% sure
that the transaction would not be
reverted so here’s where we have an
issue so for example in the Bitcoin
network it’s advised that you
wait six blocks before you’re 99.9% sure
that the transaction will not be
reverted and six blocks is 60 minutes
because each block in Bitcoin is around
ten minutes and there’s around twelve
point five seconds I believe of latency
times so that’s the block regeneration
time after that ten minute period
is completed so just about an hour the
the best estimates even under a hyper
improved Bitcoin they think that they can
probably bring it down to around thirty
minutes for a confirmation time and
that’s some that’s a serious issue
because for example you can double spend
in Bitcoin if you control if you do a
51% attack you can double spend in
Bitcoin and that would entail
controlling 51% of the hash power that
Bitcoin has to offer and we’re going to go
over that later but for Ethereum their GHOST protocol they say that you
have to wait around 30 minutes to be
99.9% sure that this transaction is
not going to be reverted and under Ouroboros the most the maximum amount of
time that you would have to wait is
around five minutes and there’s another
paper that says in this paper it says
it’s actually down to 3.6 minutes so you
have to wait less than 4 minutes for the
transaction to be confirmed I mean the
transactions confirmed immediately as
you can see when you send when you send
ADA to someone else or when you send
it to your Daedalus wallet you see
low, medium, high transaction assurance
and basically it starts off low then it
goes to medium then it goes to high by
the time it hits four minutes by the
time it hits three and a half minutes
what we have is we have a very provably
secure transaction so think about
going to that same car dealer or
making a large ticket purchase where a
double spent attack could highly benefit
the user in that situation and saying oh
you know you’re purchasing a car that’s
I don’t know worth $50,000 I only have
to wait three four minutes for the money
to go through if it’s Bitcoin we’re
going to have to wait an hour what if
the network is clogged as
well you’re gonna have to wait even
longer than that you made your
transactions may not even fit into that
block because there may be so many
unconfirmed transactions that it takes a
long time so in the effort of
speeding up transactions for goods
products and services you’re going to
want to stick with the provably secure
protocol that allows you to
verify with 99.9% accuracy that the
transactions that you place on this protocol or that you
place on this blockchain are correct so
moving forward I also printed out the
proof of work 51% attack cost so this is
how much you would need to basically
attack the proof of work network and
create this double spend problem and
right now according to the market caps
right now Bitcoin market cap is around
64.44 billion but
it has to deal less with market cap as
it has to deal with hash rates so that’s
the amount of mining machines that are
being used to attack the network so to
attack the network for one hour Bitcoin
network you would need two hundred
eighty one thousand five hundred and
twenty four dollars so people often ask
the question is it even worth it to
double spend no it may not be worth it
to double spend on Bitcoin because the
attack cost is so high but there are
things in life that are worth more than
two hundred eighty one thousand five
hundred and twenty four dollars and
certain transactions could benefit the
user or benefit the attacker if they
actually attack the network and did this
double spend issue and then
walked away with I don’t know half a
million dollars or a million dollars or
ten million dollars or a billion dollars
you never know but it can be attacked
Ethereum the attack cost is eighty five
thousand five hundred and eighty six
dollars you have to remember that as the
Bitcoin price goes down more and more
people are turning off their ASIC mining
machines and that’s going to decrease
the amount of money that it takes to
attack and this happens cyclically I’m
not saying that bitcoin is going anywhere bitcoin is here to stay
but at the end of the day this is a bear
market so it’s likely what if the price
cuts by half again what if the Bitcoin
hits like two thousand or goes under two
thousand dollars more and more people
are going to turn off their ASIC mining
machines and that’s going to decrease
the amount that you need to
attack the network and when Bitcoin
skyrockets again of course it’s going to be
very robust and strong but then it’s
going to fall back again it’s very cyclical
so when it falls again there’s gonna be
a higher entry point to attack the
network Bitcoin Cash takes around nine
thousand dollars to attack Litecoin
eighteen thousand five hundred sixty
five dollars Monero five thousand
one hundred and forty nine dollars Dash seven thousand six hundred ninety eight
so if you have if you’re going in and you’re
purchasing with Monero and you
go in to a car dealer and you buy a
hundred thousand dollar car and we don’t
know the confirmation time of Monero but
the attack costs you could double spend
it’s only five thousand dollars so what
if you walked out with two hundred fifty
thousand dollar car or you walked out
with something else there are issues there
Z Cash around 12 thousand dollars
Bitcoin Gold $890 Bytecoin $188 Siacoin
$0 Electroneum $2000 Monacoin five hundred forty dollars when you go
down to like Bitcoin Private 28 dollars
Quantum Resistance Ledger eight dollars
eight dollars to one hour attack cost
the cost it would take to attack
the network for one hour
eight dollars litecoin cash $49 Z
classic 333 dollars very small amounts
so these other coins
basically if people are accepting them
at retailers and they’re selling large
ticket items you have an issue because
you can attack the network pretty easily
Bitcoin is secure I wouldn’t say that
you can attack Bitcoin easily although
it can be done and it could be
profitable in certain situations but you
don’t want to be a what-if or could be
you want to guarantee you want a 99.9
percent accuracy and with Cardano with Ouroboros
it’s going to give you that 99.9%
accuracy in under four minutes with
Bitcoin it’s gonna give that to you in
at least 60 minutes and with Ethereum
it’s going to give you that in at least 30
minutes we’re talking about financial
institutions governments that are
waiting here
we need 99.9 percent accuracy as quick
as possible so let me know your thoughts
let me know your concerns please like
comment and subscribe and until the next
thank you

Leave a Reply

Your email address will not be published. Required fields are marked *