Over the past few years, Bitcoin has experienced a massive number of attacks and external criticism, getting a reputation as Antifragile. This term was coined by Nassim Nicholas Taleb and describes the phenomenon when something becomes popular under unfavorable conditions.
“Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile.”- says Taleb.
From this point of view, probably, to kill Bitcoin, you just have to stop criticizing it. However, in the world of constantly competing currencies and precious metals, this is very unlikely to happen.
Attacks on Bitcoin: Past, Present, and Future
One of the Reddit users compiled a list of all attacks that can be aimed at killing Bitcoin. There are three most common types of attacks on Bitcoin:
- Attacks to slowdown the Bitcoin development
- Attacks to slowdown the Bitcoin adoption
- Attacks to reduce the efficiency of the Bitcoin infrastructure
From all the above, it follows that all three types of attacks are interrelated. At the very least, they lead to the same result. Let’s consider each of them in more detail.
How To Kill Bitcoin
By imposing bans on using Bitcoin, governments can cause some inconvenience to the owners of the cryptocurrency. Bitcoin was banned in many countries, particularly in Ecuador, Afghanistan, Morocco, Vietnam, Bangladesh, and Bolivia, but these bans did not bring any results. At the same time, such countries like the United States do not even plan to prohibit cryptocurrencies.
In China and South Korea, even banal rumors about the possible prohibition of Bitcoin were immediately reflected in its exchange rate. But even in times of general public fear, Bitcoin continued and continues to exist.
Even though many countries are trying in every possible way to prohibit the use of this cryptocurrency, they simply cannot stop the interaction of their citizens with the network. Today, many services broadcast real-time blockchain data from satellites to almost all countries including Africa. Satellites enable everyone on the planet to connect to the Bitcoin blockchain even without access to the Internet.
As for transactions, security experts from VPNBrains note that there are several anonymous ways to send Bitcoins, including Tor browser, VPN services, SMS messages, encrypted instant messages or even stenography and ordinary postal services.
It is useless to prohibit Bitcoin or any specific cryptocurrency since its code may change very quickly, much faster than the subsequent legislative ban is ready. Even a well-coordinated legal attack from the UN and the WTO is likely to lead only to the fact that Bitcoin will go underground. There is a high probability that Bitcoin can become a subject of contraband, as it happened with drugs.
If we talk about the persecution of those who are engaged in mining and own considerable sums in crypto, then this has already happened. Despite such cases, underground black markets continue to gain momentum, so we can conclude that even the most severe punishments and bans do not stop users but only fuel their interest in cryptocurrency.
Because of the fight against money laundering, various governments constantly increase their pressure on cryptocurrencies. Authorities dictate their own rules and require that exchanges and wallets share their users’ personal data under the guise of KYC and AML rules. Tax authorities are interested in the data of Bitcoin traders. It is necessary to consider the fact that, one way or another, anonymous trade takes place anyway.
Cyberwarfare includes hacking and various kinds of illegal manipulations in social networks. Bitcoin, despite multiple hacking attempts, demonstrated its excellent resistance to such attacks. Bitcoin owes its high level of protection to its Proof-of-Work system.
If even cyber crooks manage to change the Bitcoin code or alter transaction records, the network will immediately reject such actions. The more decentralized are the nodes in the network, the less likely such attacks succeed.
It should be noted that Bitcoin owners and various services related to it (like exchanges and wallets) are exposed to attacks much more often than the cryptocurrency itself. For example Bitcoin wallets are exposed to attacks that involve spy software on iPhone more often than the cryptocurrency itself.
Companies serving the cryptocurrency industry often get compromised and data leakage occurs. Large Bitcoin exchanges have been repeatedly attacked. Such hacking certainly prevents the adoption of Bitcoin, and the owners who suffered from these attacks and lost their money often stop using it.
For many people, Bitcoin is still associated with crime. Popular media and even politicians often say about it. But few people understand that gold is much more likely to appear in criminal cases. The media often exaggerate the extent of damage from data breaches. Journalists create more doubts and fear without taking into account the fact that breaching companies that serve Bitcoin and hacking Bitcoin itself are two different things. As a result, such reports of hacking give rise to unjustified doubts about the safety of Bitcoin.
Using similar names
As for similar names, this is done in order to confuse users. Striking examples include Bitcoin Cash, Bitcoin Gold, and Bitcoin Diamond. Attempts to rise at the expense of a well-known brand can be called an attack too. As a rule, such an attack is characterized by good funding and includes the following components:
- Buying huge amounts of cryptocurrency that is a competitor.
- Increased mining activities.
- Spreading rumors about Bitcoin. There are a lot of articles against the original Bitcoin. Many of them are ordered by competitors.
- The creation of an opposition insisting that, for example, Bitcoin Cash is “real” Bitcoin, although this is certainly not the case.
- Separation of bigger communities. For example, r/btc on Reddit separated from the r/bitcoin.
Despite the fact that many newcomers were deceived by the bitter counterparts of Bitcoin, I would like to hope that the technical and economic merits of Bitcoin will become so obvious that in the near future, it would be impossible to cheat even those people who have never heard anything about cryptocurrencies.
Attacks aimed at the cryptocurrency infrastructure
Intentionally creating a big flow of transactions to slow their processing helps other cryptocurrencies to get popular. In this case, the increase in commissions for Bitcoin transactions helped alternative coins to justify their existence.
The very well-known 51% attack is improbable to happen with Bitcoin, but still, many people fear such an attack carried out by state-sponsored players like China.
It can also happen that the dominance of the US dollar will soon come to an end. Some financiers suggest that soon Bitcoin will be able to outshine the US dollar. By the way, this turn of events would interest the Chinese authorities. In this situation, they could force their miners to work towards Chinese political goals, scarifying immediate monetary gains.
The so-called zero-day bug is an attack associated with an unknown vulnerability for the correction of which the developers have 0 days. Because of such an attack in 2010, 184 billion Bitcoins were created. The problem was resolved within 5 hours, and the blockchain got forked. The incident did not cause severe trouble because, at that time, Bitcoin was not used by so many people. But if this happens today, it will cause absolute chaos; many users will suffer heavy losses, and Bitcoin would get awful PR.
Network attacks can also be carried out by intelligence agencies, such as NSA. They can force operating system and CPU vendors to introduce special exploits in their products. It has long been known that most of the major companies in Silicon Valley cooperate closely with intelligence agencies. These include all major IT giants like Apple, Microsoft, Google, and Facebook.
Some security experts say that in 10 years quantum computing will be able to decipher the Bitcoin cryptosystem. But even if this becomes possible, Bitcoin will most likely immediately switch to an attack-resistant algorithm.
It should be noted that if you consider the total number of Bitcoin users, then a really “killer” attack would require a lot of effort. Only a well-funded party can inflict significant damage to the Bitcoin system.
Ultimately it is possible to kill anything, even Bitcoin. Fortunately, Bitcoin has already experienced many unpleasant moments and still remains very reliable. Probably, the next test Bitcoin will have to go through will happen during the next financial crisis. In the meantime, I do not worry much about its future.