Blockchain Security: Full Blocks Provide Protection Against Fraudsters
A recent study conducted by researchers from Florida Atlantic University and the University of Mississippi has revealed that blockchains with “full” blocks, especially when there is a transaction queue, offer an additional layer of security against malicious actors, money launderers, and potential fraudsters.
The research paper titled “Bitcoin Blocksize, Custodial Security, and Price” delves into the Mt. Gox crash and other incidents involving cryptocurrency theft from crypto exchanges.
The study is based on the premise that individuals engaging in illicit activities aim to complete their laundering transactions quickly. The researchers propose that the closer a block is to its limit, the higher the likelihood that the next transaction will be published in a later block rather than the most current one. This delay hinders cybercriminals from laundering stolen Bitcoin swiftly.
To test their hypothesis, the researchers analyzed historical Bitcoin blockchain data and a scam report from a crypto exchange. They created a “fullness” score for blocks to evaluate the data, using a sample period from 2010 to 2021.
The team then examined two specific metrics: the impact of block fullness on Bitcoin price and its effectiveness as a deterrent for malicious actors. The findings confirmed their hypothesis that full blocks act as a deterrent because they indicate network congestion. Additionally, they concluded that full blocks also contribute to increased network security, which is reflected in the price of Bitcoin.
According to the research, block fullness is approximately 20% lower on days when cryptocurrency breaches or fraud occur.
Hot Take: Full Blocks Bolster Blockchain Security
The recent study conducted by researchers from Florida Atlantic University and the University of Mississippi sheds light on an interesting aspect of blockchain security. By analyzing historical data and evaluating block fullness, the researchers discovered that full blocks provide an added layer of protection against hackers, scammers, and money launderers.
The findings suggest that the closer a block is to its limit, the more difficult it becomes for cybercriminals to launder stolen Bitcoin quickly. Furthermore, the research indicates that full blocks not only act as a deterrent for malicious actors but also contribute to network security, which is reflected in the price of Bitcoin.
This study highlights the importance of maintaining sufficient block capacity and addressing transaction congestion within blockchain networks. By doing so, we can enhance the security and integrity of cryptocurrencies, making them less susceptible to fraudulent activities.
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