https://nyti.ms/2NYYSdw
Cryptocurrency’s proof of work system generates coin through mining with cryptographic math problems that have known solutions. It probably helps to understand the proof of work concept. Crypto currency like bitcoin use a decentralized version of Hashcashing. In this case, the proof of work hashing requires all the work and subsequently has time estimations integrated into the solution process. Knowing the solution doesn’t really help here in advance since proof of work sets expectations of work hashing via sender and receiver communications (all the bad guesses are expected). If fraud were to occur it would be likely in a time compressed manner and requiring access to all decentralized server nodes receiving fraudulent or time misreported work. In other words the server nodes would need be hacked. Servers compromised on this order probably poses no more if not less risk relative to traditional banking industries in terms of vulnerability I would imagine.. If any vulnerabilities existed in a significant and endemic way it would likely show with respect to coin scarcity and devaluation. I imagine there are indirect measures for fraud on this point. Most crypto currency security-vulnerabilities exist because of poorly administered user accounts through exchange systems but not thru any inherent weakness of the coins production design. It is designed to discourage fraud and more likely has pushed most fraud exploitation in banking to other areas relative traditional banking. Proof of work is designed to control scarcity of the coin, and while scarcity and fraud may be thought interchangeable, I think it is a bit misapplied stating that the coin's cost has been held arbitrarily high for the sake of warding off fraud and for verification. Speculative value of the coin comes thru classic market transactions and neither relate to the inherent structure of the coin's production value. Verification of the bitcoin is actually relatively inexpensive and is an integrated ledger in the bitcoin (hashed) and verified through the p2p node servers ledger systems (my apologies if I am incorrect). Certainly higher demand for the coin (scarcity) translates into potentially more miners that could come online to produce more coin hoping for higher returns, but considering that the average miner returns are quite low for even a basic setup (daily a couple of dollars for many), incentives to inflate the coin's supply and demand are always tempered relative to one another. How the insurance of the "real deal" of the coin play's into its intrinsic market demand I think is personally nominal. The bitcoin's production and security (verification) are not synonymous.
Cryptocurrency’s proof of work system generates coin through mining with cryptographic math problems that have known solutions. It probably helps to understand the proof of work concept. Crypto currency like bitcoin use a decentralized version of Hashcashing. In this case, the proof of work hashing requires all the work and subsequently has time estimations integrated into the solution process. Knowing the solution doesn’t really help here in advance since proof of work sets expectations of work hashing via sender and receiver communications (all the bad guesses are expected). If fraud were to occur it would be likely in a time compressed manner and requiring access to all decentralized server nodes receiving fraudulent or time misreported work. In other words the server nodes would need be hacked. Servers compromised on this order probably poses no more if not less risk relative to traditional banking industries in terms of vulnerability I would imagine.. If any vulnerabilities existed in a significant and endemic way it would likely show with respect to coin scarcity and devaluation. I imagine there are indirect measures for fraud on this point. Most crypto currency security-vulnerabilities exist because of poorly administered user accounts through exchange systems but not thru any inherent weakness of the coins production design. It is designed to discourage fraud and more likely has pushed most fraud exploitation in banking to other areas relative traditional banking. Proof of work is designed to control scarcity of the coin, and while scarcity and fraud may be thought interchangeable, I think it is a bit misapplied stating that the coin's cost has been held arbitrarily high for the sake of warding off fraud and for verification. Speculative value of the coin comes thru classic market transactions and neither relate to the inherent structure of the coin's production value. Verification of the bitcoin is actually relatively inexpensive and is an integrated ledger in the bitcoin (hashed) and verified through the p2p node servers ledger systems (my apologies if I am incorrect). Certainly higher demand for the coin (scarcity) translates into potentially more miners that could come online to produce more coin hoping for higher returns, but considering that the average miner returns are quite low for even a basic setup (daily a couple of dollars for many), incentives to inflate the coin's supply and demand are always tempered relative to one another. How the insurance of the "real deal" of the coin play's into its intrinsic market demand I think is personally nominal. The bitcoin's production and security (verification) are not synonymous.
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