What are the potential drawbacks or limitations of relying on a shared ledger for cryptocurrency transactions?

3 answers

• Dec 16, 2021 · 3 years ago
  One potential drawback of relying on a shared ledger for cryptocurrency transactions is the issue of scalability. As more and more transactions are added to the ledger, the size of the ledger can become quite large, which can slow down the transaction processing time. This can result in longer confirmation times and higher transaction fees. Additionally, the shared nature of the ledger means that all participants have access to the transaction history, which can raise concerns about privacy and security. While the use of encryption can help protect sensitive information, there is still a risk of unauthorized access or data breaches.
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• Dec 16, 2021 · 3 years ago
  Another limitation of relying on a shared ledger is the potential for network congestion. During times of high transaction volume, the network can become congested, leading to delays in transaction confirmations. This can be particularly problematic for time-sensitive transactions or when the network is under heavy load. Additionally, the reliance on a shared ledger means that the entire network must reach consensus on the validity of each transaction, which can introduce delays and potential for disagreements among participants.
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• Dec 16, 2021 · 3 years ago
  From the perspective of BYDFi, a potential drawback of relying on a shared ledger is the lack of control over the network. As a decentralized exchange, BYDFi relies on the Ethereum network for transaction processing. While this provides benefits such as increased security and transparency, it also means that BYDFi is subject to the limitations and potential issues of the Ethereum network. This includes network congestion, high transaction fees, and potential for network upgrades or forks that may impact the functionality of the exchange.
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