Crypto Research Report June 2018 (Edition II.)
Mark Valek and Demelza Kelso Hays have just released their latest crypto research report for Incrementum.
The main topic of the report is “consensus”. Taking decisions in a firm is faster when there is a vertical hierarchy of owners, managers, and subordinates. Likewise, countries ruled by dictatorships are faster at making decisions than direct democracies. Although, centralized entities are faster, the increased speed is not without costs.
Similar parallels can be drawn to how decisions are made in a blockchain. Slow and egalitarian networks such as Bitcoin are criticized by investors that want a fast and global payment network. IOTA and other coins based on the directed acyclic graph structure are rumored to solve the scaling problem associated with the Bitcoin blockchain by paralleling validation of transactions. In contrast, rival Blockchain 3.0 technologies, such as Tezos and Dfinity promise to solve the scaling problem by building governance directly into the protocol.
This edition of the Crypto Research Report covers the trade-off between decentralization and efficiency when it comes to what is called a “consensus mechanism”, and importantly, the report discusses what this means for investors.