The level of decentralization for each blockchain network represents one of its most valuable assets. This idea is reinforced by the fact that Bitcoin remains the most valuable cryptocurrency, although not having the most modern technology.
Also, while a certain number of blockchain projects have achieved different levels of decentralization, new research published on the Digibyte (DGB) subreddit has called the network’s decentralization levels into question.
The analysis reportedly mirrors one used by Litecoin Founder Charlie Lee in 2018, to reassure that the Litecoin is extremely secure and mining on the network is very healthy.
In lite of recent 51% attacks and https://t.co/yfy2GcBfQE info, rest assured that the Litecoin is extremely secure and mining is very healthy. ??
– Pools are well distributed (largest 22%)
– Hashrate up 50x (past 1 year)
– High capital costs to attack ($322-761MM + ~$38-50k/hr) pic.twitter.com/hD8IrYM8dD
— Charlie Lee [LTC⚡] (@SatoshiLite) May 30, 2018
For the basics, a common metric for measuring the decentralization of a blockchain is the total value in USD per hour needed to carry out a 51% attack on the network. We recently covered this in the case of Bitcoin Cash, which recently witnessed a halving of block rewards, and saw low network speed after that.
The USD value is often related to the amount of hash power that an existing miner or mining pool on the network needs to carry out an attack. According to the latest study, an unknown entity on the network currently needs only to “rent a few hundred dollars worth of hash power on NiceHash to 51% the network at will.”
Per the research, the relative (40%) control that this miner has over the network is as a result of the miner possessing hardware that can mine DGB using Skein and Quibit, two of Digibyte’s 5-algo system, at a level at least three times faster.
The study also highlights a discrepancy in both algorithms since miners can mine more Digibyte blocks by monopolizing all Skein and Qubit blocks. Two entities have already taken advantage of the superior hash power to mine hundreds of thousands of dollars worth of DGB in recent weeks.
Digibyte (DGB) Loses Over 20% in the Last 24 Hours.
At the time of writing, the price of Digibyte (DGB) is over 20 percent lower on the daily chart, even though most of the top cryptocurrencies, including Bitcoin (BTC), are posting mild gains.
But it would be vital to note that these losses cannot be simply attributed to the discovery of supposed concentration of hash power on the network. The coin had rallied over 100% in the previous week, and the current losses could be a mere market retracement.
Meanwhile, in another recent update about Digibyte, Coinfomania reported Digibyte founder Jared Tate as revealing that leading cryptocurrency exchange, Binance had asked for $300,000 as well as 3% of the coin supply, before listing it on their platform.
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