The biggest threats to Bitcoin in 2020
Tech entrepreneur, author and Bitcoin proponent Andreas Antonopoulos has shared his view on what factors or global events could seriously threaten Bitcoin’s existence in 2020 and beyond.
Turns out, the list is quite short.
Bitcoin would likely survive a 51% attack
Firstly, Antonopoulos noted that 51% attacks—usually the biggest elephant in the room when it comes to Bitcoin’s existential threats—are not that scary in reality. While it’s possible, theoretically, that a large group of malicious actors could try and wrest control over 51%—or more—of Bitcoin’s hash rate to disrupt the network, such attacks are extremely costly and not even too effective.
“Such attacks are very expensive to pull off, require enormous coordination, deliver very little in benefit and can be relatively easily thwarted. So for such an enormous cost, such little reward and such enormous risk, we haven’t seen 51% attacks and I don’t think we will see 51% attacks,” said Antonopoulos.
He added that even if a 51% attack did occur, Bitcoin would likely survive it, since there’s not much that malefactors could actually do during the attack. They wouldn’t be able to steal people’s money, change consensus rules or turn invalid transactions into valid ones. That’s thanks in large part to Bitcoin’s decentralized nature, since it’s not just miners who validate transactions—it’s also nodes, exchanges and merchants.
Is Bitcoin disaster-proof?
Speaking of more catastrophic events, Antonopoulos said that while a massive electric failure could certainly damage Bitcoin, banks and existing financial systems would suffer a much more severe impact.
“Bitcoin would be one of the first things to come back,” in the event of a massive electric failure or a natural disaster that damaged infrastructures such as the Internet or the electric grid, said Antonopoulos.
Not only is Bitcoin a self-funding system; its decentralized community of users, miners and node operators have many incentives to rebuild their local infrastructures in a timely fashion.
What is the biggest threat to #Bitcoin? 51% attacks? Government crackdowns? Massive failure of the electric grid? Pandemics? ...Sharknados? 🦈🌪️
New Q&A up on the aantonop channel! 👀 https://t.co/Jn2qnUvOGH
— Andreas ☮ 🌈 ⚛ ⚖ 🌐 📡 📖 📹 🔑 🛩 (@aantonop) May 19, 2020
As Decrypt reported recently, Bitcoin isn’t dependent on an Internet connection to operate in some instances. For example, Blockstream’s satellite network enables transactions to be made with just a TV satellite dish and a smart device. “Bitcoin just requires a communication medium,” said Antonopoulos; even a shortwave radio or telephone lines could be used in a pinch.
Similarly, while concerted attacks against mining equipment—such as viruses or worms—could prove troublesome, they are “survivable” and would result in quick fixes, Antonopoulos added.
With hackers and natural disasters out of the way, what’s the next biggest threat to Bitcoin?
What would happen if governments soured on Bitcoin?
If there’s one thing that does worry Antonopoulos, it’s political attacks on Bitcoin and other cryptocurrencies. In particular, he’s concerned about “sneaky political attacks” such as changing the tax status of cryptocurrency in order to drive it underground. “I do think that such attacks could alienate a big chunk of the middle class and speculative investors, who will not take the risk to oppose governments in order to use Bitcoin,” Antonopoulos explained.
He pointed out that, in his view, more than half of the human population lives under totalitarian, dictatorial or authoritarian regimes where “opposing the government is a matter of life or death.”
Viewed in this light, he concluded, breaking the law to use Bitcoin would probably be the smallest of possible offenses while “the incentives are totally different.”