It could be the end of Bitcoin. By Tokenomics Engineer Eloisa Marchesoni, There has been a lot of buzz lately about an imminent nuclear threat from Russia; the fact is that, according to various sources, Moscow is subtly moving toward Europe. Be it a nuclear train, nuclear submarine, or the four “Topol” intercontinental mobile missile launchers - not to mention the nuclear power plant that has been on the brink of exploding for months - there is clearly a cause for concern. In times like this, the health of our bitcoins is the probably last thing we would consider worrying about; however, I know many can’t help but ask, “if the Internet blows up tomorrow, what will become of my crypto?” - and that is a fair and legitimate question. Connect the Dots The Internet backbone consists of many networks owned by a myriad of companies. Optical fiber trunk lines consist of many fiber cables bundled to increase capacity, or bandwidth. Fiber-optic communication remains the medium of choice for several reasons. The real-time routing protocols and redundancy built into the backbone are also able to reroute traffic in case of a failure. These backbones are interconnected at various Internet Exchange Points (IXP) around the world. The resilience of the network comes from the redundancy of these nodes: they form an Optical Mesh Network. With mesh networking, the distance between two nodes does not matter as long as there are enough nodes in between to pass the message along. When one node wants to communicate with another, the network automatically calculates the best path. If a node can no longer operate, for example because it has been removed from the network or because a barrier blocks its ability to communicate, the rest of the nodes can still communicate with each other, either directly or through intermediate nodes. 51% Bad Guys The blockchain is resilient by definition, utilizing peer-to-peer networks and distributed systems which include registers to store transactions. Its structure is designed as a digital log file and stored as a series of linked groups, called blocks. Each individual block is cryptographically locked with the previous block. Once a block has been added it cannot be altered, unless a simple majority of 51% of the blockchain participants agree to do so. Here is where the main consensus mechanisms come into play and where we define the majority – Proof of Work, which is based on computing power, and Proof of Stake, which is based on assets. In the transactions field, a brings huge risks to the continuity of the blockchain system a potential security hazard. 51% Attack Fortunately, if for any reason a supervillain were to commit to destroying Bitcoin, they would be required to possess half of the current computational capacity. So let’s entertain this possibility, and hypothetically the following legitimate instances: In theory, the attacker could: Prevent anyone from mining valid blocks Reverse blockchain transactions Potentially double-spend transactions previously seen in the chain Prevent other transactions from succeeding The attacker, though, could not: Handle non-possessed assets Prevent or reverse transactions (they’ll show as 0/unconfirmed at least) Create assets out of thin air Last but not least, changing historical blocks (namely, finalized transactions before the attack), would be exceedingly difficult even by controlling the blockchain. Older transactions are exponentially unchangeable, and impossible to modify before a checkpoint, where they become permanent. The Anecdote: A Georgian Lady For years mining unused copper cables for scrap has been an everyday money-making practice in the former Soviet Union, similar to the countless people stateside collecting bags of plastic and recyclables from street waste bins. At one point a group of entrepreneurs took it upon themselves to drive tractors through an abandoned nuclear test field in Kazakhstan ripping up hundreds of meters of cables. In 2011, an elderly woman scavenging near Tbilisi damaged a fiber optic cable in search of copper to sell as scrap. Georgia in those days provided 90 percent of the connectivity to Armenia, and the disruption was so severe that it also affected Azerbaijan, totaling 4 million people offline for 12 hours, which, all in all, given the damage and lack of redundancy, was not too bad. After all these years, the Internet network is more resilient due to the increased node redundancy, because something done by accident could be far worse, if done on purpose. Net Split What we mentioned earlier is a concrete and striking example of , that is, the force majeure disconnection of one or more nodes in the Internet backbone. If the disconnected portion is extensive, it might be possible to maintain the connection within the area, which would remain disconnected from the rest of the world. Net Split If such a Net Split would happen nowadays, Armenian citizens could continue to send and receive Bitcoins, unaware of being in an exclusively Caucasian network. Should the Armenian blockchain be brought back online again and able to connect with the rest of the world, the transactions in the blocks that rollback would likely be added to the mempool (in the memory list of unconfirmed transactions). If the same amount has been spent on both forks of the blockchain (Double Spending), the transaction on the “losing fork” will be lost, since the network will reject it for trying to spend an already spent output. Furthermore, if anyone would travel from one Split-Country to another, he would inevitably join the other fork. In the case of a perpetual, irrecoverable split, we would be effectively dealing with two different currencies. To avoid chaos, it would be better for one of the forks to adopt a different software client. 51% POW & POS Attacks The current combined hashrate of the entire Bitcoin compartment is traveling at 235 EptaHash/s. In total, this means that it would take a minimum of $10 trillion in hardware to get to 120 EH/s and launch a 51% attack, without considering the huge costs of power, maintenance, staffing, and cooling. A similar remark should be made for Ethereum, which has recently moved from POW to POS. Whereas the previous 500 TeraHash/s and roughly $5 trillion in hardware would be enough to launch such an attack, with POS it would require $9 trillion stacked, with the ongoing risk for the attacker to see the rules rewritten, as in the case of Ethereum's hard fork that led to the creation of its "Classic" counterpart in 2015, where The $60 million that had been exploited was mounded up. It might seem that in the current state of affairs, it is impossible to launch 51% attacks, but is that really the case? What would happen in the wake of an extreme collapse of the network’s hashrate? “I will attack Oceania with five tanks” Any good Risk player knows that once Oceania is taken, winning the game becomes a piece of cake because it consists of 4 states that are well defensible as they are accessible only from Siam. But scarcity of connections is not a good thing in all fields. What if, for some reason, a bad guy decided to disconnect the whole of Oceania. Upon examination of the submarine Cable Map, it turns out that it would only take out 5 IXPs to blow up the Internet in at least Australia, New Zealand, all the surrounding archipelagos, and most of New Guinea. We can speculate on the blockchain-level repercussions thanks to an old post of Satoshi Nakamoto: “If the network is segmented and then recombines, any transactions in the shorter fork that were not also in the longer fork are released into the transaction pool again and are eligible to get into future blocks. Their number of confirmations would start over. If anyone took advantage of the segmentation to double-spend, such that there are different spends of the same money on each side, then the double-spends in the shorter fork lose out and go to 0/unconfirmed and stay that way. It wouldn’t be easy to take advantage of the segmentation to double-spend. If it’s impossible to communicate from one side to the other, how are you going to put a spend on each side? If there is a way, then probably someone else is also using it to flow the blockchain over.” Exploiting a Net Split The Oceania case, applied to the Bitcoin network, is not so worrisome given and considering the low hashrate on that continent; if indeed the two networks were disconnected for a certain amount of time, the one with the chain having done the most work would prevail. Things would not go so smoothly, however, if there were a blackout in North America (45% global hashrate). Russia, Kazakhstan and China (38%) could easily enact a 51% attack on the rest of the world, and even if the U.S. and Canada came out of isolation, the North American fork would still be the loser, causing immeasurable damage to the economies of these countries. Mix’n’Match A temporary blackout could be the lesser of evils, however, because if the «Oceania» scenario were to occur, there would be nothing to stop the Asian trio from Double Spending on both branches of the blockchain with the complacency of agents based in North America: all they would need to do is get their act together first. Rogue miner attempts to overcome the split could be blocked by implementing Denial-of-Service (DoS) attacks, keeping them from reacquiring control of the chain. If the hashrates of the two split networks were nearly equivalent, someone could alter the balance without too much effort through Reverse Bribery Attacks. It could be possible to rent some of the computational power of the opposing side, to shut it down and gain 51 percent control by subtraction. The possibilities for an attack at this juncture are plentiful: an extended Net Split would involve the simultaneous presence of the same digital identity on two different networks. This event could allow malicious attackers to take possession of the orphaned ones, having the legitimate owners helpless on the other chain. Russia nukes Ukraine Scenario Certainly, Putin was not very happy on his birthday to see his favorite bridge knocked down by Zelensky: he could easily respond, perhaps with a small tactical nuclear bomb on Snake Island.
Of course, the U.S. would respond, while China would try to take over Taiwan. In the best case scenario (i.e., that after a few nukes everyone would stop), we could find ourselves in a similar scenario to the one described above, with a Western and an Eastern Internet disconnected from each other and an Oceania loyal to the U.S. but probably isolated from the rest of the world by 5 well-placed blows. As we have seen, all the assets on the various blockchains could be double-spent on both forks by those capable of doing so, but it would still be a loss-making move, as a more than 50 percent collapse in the value of both branches is to be expected. Blockchained Disarmament Instead of being one of the first victims of a nuclear holocaust, blockchain could be one of the main deterrents. The verification of the decommissioning of a nuclear warhead implies an enormous amount of data. The inspectors must record status and locations of the warheads, details of the inspections and facilities. To maximize trust in the process, these data must be stored in a reliable and persistent way. Among other things, a Nuclear Blockchain could: Create an immutable, encrypted ledger for objects subject to treaty control. Serve as a cryptographic repository for national declarations, allowing parties to disclose sensitive data in a gradual manner Function as an international trust-building measure, allowing any third party to verify disarmament data without seeing it. Deliver a safe layer for a private IoT composed of location sensors and environmental monitors, enabling real-time tracking of remote sites and automatic alerts to participants in the event of violations. Space Nodities Satoshi Nakamoto reminded us earlier that a single globally visible node would guarantee “the unforkability” of a blockchain, so why not actually implement it? There are already 2300 Starlinks in orbit, securing the resilience of the Internet, and it wouldn’t take much effort to make them Bitcoin nodes, perhaps even loading each one with 32 Ethereum in POS. They could still become military targets, but would it be worth taking them all down, risking a scenario like the one in the beginning of the Gravity movie? About Eloisa Marchesoni is a Tokenomics Engineer focusing on token model architecture, token macro-/micro-economics structure, crypto market simulations and gamification strategies for Web3 businesses. She is currently a partner to VCs and accelerators, while also working as an advisor to self-funded crypto startups, which she has been doing since 2016. Eloisa

The writer is smart, but don't just like, take their word for it. #DoYourOwnResearch

Ethereum

The Ultimate Utility: 2B3D is Using NFTs to Save Military Veteran Lives

A Digital-First Approach Could Take the Headaches Away from Buying Insurance

Too Long; Didn't Read

CTA: Download the FREE AI Productivity Shift report

If the Internet Blows up Tomorrow, What Will Become of my Crypto?

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

45Drives Launches Free Setup Wizard to Demystify Linux Storage

51% Attack: Explaining the Network Disruption

An In-Depth Look at Blockchain Validation

Understanding 51% Attacks on Bitcoin and Blockchain

What Is a 51% Attack?

45Drives Launches Free Setup Wizard to Demystify Linux Storage

51% Attack: Explaining the Network Disruption

An In-Depth Look at Blockchain Validation

Understanding 51% Attacks on Bitcoin and Blockchain

What Is a 51% Attack?

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps