Blockchain Congestion and Transaction Queues Help Deter ‘Nefarious Actors’: Study
A recent study conducted by researchers from Florida Atlantic University and the University of Mississippi has found that blockchains with “full” blocks and transaction queues provide an additional layer of protection against nefarious actors, money launderers, and potential fraudsters. The study, titled “Bitcoin Blocksize, Custodial Security, and Price,” delves into the Mt. Gox crash and other instances where cryptocurrencies were stolen from crypto exchanges.
The study is based on the idea that individuals involved in illicit activities aim to complete their laundering transactions as quickly as possible. According to the researchers, when block sizes are closer to their limit and there is a transaction queue, there is a higher likelihood that the next transaction will be published on a later block rather than the most current one. Therefore, when cybercriminals breach or shut down a fraudulent crypto exchange, they want to launder the stolen Bitcoin quickly.
In order to test their hypothesis, the researchers analyzed historical data from the Bitcoin blockchain and a scam report from a crypto exchange. They assigned a “fullness” score to blocks during the period from 2010 to 2021 to evaluate the data. Using this benchmark, they examined two specific metrics: the impact of block fullness on the price of Bitcoin and its effect as a deterrent for bad actors.
The findings of the study confirmed the researchers’ hypothesis. They discovered that full blocks on the Bitcoin blockchain act as a deterrent to hackers and scammers because they indicate congestion. Additionally, they concluded that full blocks also signal a rise in network security, which is reflected in the price of Bitcoin. As a result, the researchers determined that block fullness has a 20% lower occurrence on an “average day” when there is a cryptocurrency breach or fraud.
Implications of the Study
This study sheds light on the role of blockchain congestion and transaction queues in deterring nefarious activities within the cryptocurrency ecosystem. The findings imply that maintaining full blocks and a higher level of congestion can discourage potential hackers, scammers, and money launderers from exploiting the system.
By creating additional obstacles and delays for these bad actors, the blockchain ecosystem becomes more secure and less vulnerable to attacks. This increased security is reflected in the price of Bitcoin, as investors perceive a safer environment for transactions.
Furthermore, the study highlights the importance of monitoring and addressing blockchain congestion proactively. By recognizing the connection between block fullness, network security, and price, authorities and stakeholders can implement measures to maintain the integrity of the cryptocurrency ecosystem.
The study conducted by researchers from Florida Atlantic University and the University of Mississippi demonstrates that blockchains with full blocks and transaction queues serve as a deterrent to nefarious actors in the cryptocurrency space. By increasing congestion and delaying transactions, the blockchain ecosystem becomes more secure and less susceptible to fraudulent activities.
Understanding the relationship between block fullness, network security, and price allows stakeholders to take appropriate measures to safeguard the cryptocurrency ecosystem. By actively monitoring and addressing blockchain congestion, authorities can create a safer environment for investors and users.
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