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Blockchain Semantics Blog How are scandals and theft affecting blockchain adoption?

How are scandals and theft affecting blockchain adoption?

Feb. 5, 2018, 5:58 a.m. GMT

One of the biggest barriers to increased Blockchain adoption is Bitcoin’s public perception as a venue for the dark net’s money-laundering, drug-related and other illicit activity. No point mincing words. For example, Silk Road, the erstwhile infamous marketplace for illicit goods, depended on bitcoin for a majority of its payments. Bitcoin and the blockchain are themselves neutral, as any technology, and are “dual use“, that is, they can be used for good or evil.

Although there are possibilities for malicious use of the blockchain, the potential benefits greatly outweigh the potential downsides. Over time, public perception can change as more individuals themselves see the usage of blockchain in other industries. Another perception is that blockchain can be difficult to use. One should remember that blockchain applications will have similar UI and front-end to conventional applications- blockchain is just the plumbing that has changed in the back-end, the average user may probably not even need to concern herself with the technology at the back-end.

Another barrier to blockchain adoption is the ongoing theft, scandals, and scams in the cryptocurrency industry. A few new altcoin “pump and dump” scams that try to bid up new alt coins to quickly profit have caught attention. The collapse of the largest bitcoin exchange at the time, Tokyo -based MtGox, March 2014 came to wide public attention too. People say an explanation is still needed for the confusing irony that somehow in the blockchain, a public transparent ledger, coins can disappear and still remain lost months later.

The company said it had been hacked, and that the fraud was a result of a problem known as a “transaction malleability bug”- the bug allowed the malicious user to double-spend, transferring bitcoins into their accounts. Analysts remain unsure if  MtGox was an externally perpetrated hack or an internal embezzlement. The issue is that these this kind of thefts persist. For example, recent headlines informed us that the Moolah CEO disappeared with $1.4 million in bitcoin in October 2014, $2 million of Vericoin was stolen in July 2014, and $ 620,000 was stolen in a Dogecoin mining attack in June 2014 and several, several more since.

Blockchain is an evolving technology and one should expect more than a few hiccups as new technology finds its way into the mainstream. These events may even be hailed as good as it helps the bad and the weak actors clear away- then the good and solids remain.

To learn more about different challenges faced by Blockchain and Bitcoin, and how the technology is evolving as a result of these challenges, pls visit Blockchain and Bitcoin Certification by Blockchain Semantics.

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