Study: Hard Forks Threaten Cryptocurrency Stability
According to new research, the stability of digital currencies could be undermined by software updates, also known as “hard forks”. The authors of the work are confident that clearer guidelines for updating software will help stabilize cryptocurrencies.
The study was conducted by a team at the Oak Ridge Institute for Science and Education led by Benjamin Trump. They studied over 800 hard forks and soft forks of bitcoin.
The authors of the paper acknowledge that digital currencies have the potential to significantly transform the world of commerce and information exchange thanks to their underlying blockchain technology, while claiming that governance issues threaten the stability of cryptocurrencies..
“This split of blockchains of cryptocurrencies could lead to people losing faith in them and that they can survive as a reliable exchange mechanism,” writes Trump.
Analysts found that a significant part of the forks of bitcoin and altcoins could not survive for more than 7 months, although some of them took a place in the market and lasted for several years. The authors of the work expect that hard forks will be more regular, and this year their number may reach 50.
“Hard forks are a threat to maintaining a stable and predictable operating platform, which is vital for cryptocurrencies if they are to be used to carry out day-to-day financial transactions,” the document says..
Regarding bitcoin’s prospects as an internationally recognized medium of exchange, Trump says that cryptocurrency network operators such as miners, wallet developers and exchanges need to develop better governance tools to ensure stability..
According to another study published by the Satis Group at the end of August, the bitcoin price could reach $ 98,000 in the next 5 years. Its authors expect that the market capitalization by 2028 will be $ 3.6 trillion, and 90% of this amount will be invested in cryptocurrencies as an offshore instrument for making deposits.
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