The Issues On The Sustainability Of Cryptocurrency
Since the launching of the first cryptocurrency blockchain last 2009, many blockchains around the globe have emerged for the following reasons:
- To address the issues of its PoW-operated predecessorssuch as interoperability, scalability, and sustainability through employing PoS cryptography.
- To create a decentralized electronic payment that is based on cryptographic proof instead of trust. In this way, all the transactions are done with 100% transparency as it employs a peer-to-peer electronic system.
- To solve other issues in the real world like inflation, corruption, expensive money transaction fees, financial ambiguity, exclusion of third parties, and lack of economic opportunities.
Because of these promising features, the blockchain community has grown considerably. For this reason, some blockchain creates their versions of blockchain bridges for the sole purpose of sustaining the peer-to-peer electronic system and to provide convenience in terms of cryptocurrency transactions in between blockchains.
Blockchain System
The involvement of virtual currency in online transactions exposes itself to cyber vulnerabilities like hacking or counterfeiting. To address this issue, blockchain is created in which all the information and transactions using digital tokens are recorded for tracking ownership and monitoring any illegal activities. The establishment of peer-to-peer review system made it possible to identify any illegalities before it affects the system, and this is done through a challenge. For example, if any user is caught jeopardizing the interest of the network by submitting invalid blocks, it will be challenged by other users. If the challenger has proven the illicitness of the suspected user, they will receive incentives through tokens from the submitter. Otherwise, the challenger will lose some tokens as compensation to the wrongly accused. As an effect, 100% transparency is ensured since the people within the system will review each transaction to maintain the user-centric features.
Generations of Blockchains
Just like how great civilizations have survived, blockchains also have different generations. Each of these generations has its pros and cons that is why developers keep on innovating it using cryptographs to ensure a seamless transaction for end users. Currently, there are three generations of blockchain. The first one is Bitcoin followed by Ethereum and then Cardano. The first two generations use Proof-of-Work cryptography which is not environmentally friendly because it consumes a large amount of energy to work efficiently. Aside from that, its interoperability and scalability are the challenges it needs to resolve. For this reason, Cardano is created which uses Proof-of-Stake cryptography that provides convenience to the end-users because of its excellent interoperability and scalability. The development of Cardano Bridge is its ultimate solution to decongest exchange traffic in between the conversions of native tokens from ADA to other types of cryptocurrencies. Hence, Cardano is gaining status in the crypto world because it addresses the issues of its predecessors at the same time it is on the road to being a decentralized application as it pushes itself in becoming a mature blockchain.