What are the potential challenges or limitations of a public ledger in the cryptocurrency industry?

3 answers

• Dec 25, 2021 · 3 years ago
  One of the main challenges that a public ledger faces in the cryptocurrency industry is the issue of privacy. While the transparency of a public ledger is one of its key advantages, it also means that all transactions are visible to anyone. This can be a concern for individuals who value their privacy and don't want their financial activities to be publicly accessible. However, there are privacy-focused cryptocurrencies and technologies being developed to address this challenge and provide more anonymity for users.
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• Dec 25, 2021 · 3 years ago
  Another challenge is scalability. As the number of transactions on a public ledger increases, so does the amount of data that needs to be processed and stored. This can lead to slower transaction times and higher fees. However, there are ongoing efforts to improve the scalability of public ledgers through technologies like sharding and layer 2 solutions, which aim to increase the transaction capacity and reduce the burden on the main blockchain.
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• Dec 25, 2021 · 3 years ago
  From BYDFi's perspective, one potential challenge of a public ledger in the cryptocurrency industry is the risk of front-running. Front-running refers to the practice of traders using privileged information to execute trades before other market participants, thereby profiting from the price movements caused by their own trades. While front-running can occur in any market, the transparency of a public ledger makes it easier for malicious actors to identify and exploit trading opportunities. However, there are measures being taken to address this issue, such as decentralized exchanges that aim to eliminate the need for intermediaries and reduce the risk of front-running.
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