In a few months, it will have been eleven years since the Bitcoin network was launched by Satoshi Nakamoto. The fact that the digital cash system has simply existed for this long is a grand achievement, but this is still an experimental project that could fail.
Bitcoin price predictions of anywhere from $42,000 by the end of 2019 to $100,000 by the end of 2021 have been made this year, but as Blockstream mathematician Andrew Poelstra has explained in the past, the developers behind the cryptocurrency are worried about just making sure the system doesn’t completely fall apart more than anything else.
51% attacks are often brought up when it comes to ways in which Bitcoin could eventually fail, although improvements related to mining decentralization are in the works. Impending government crackdowns on Bitcoin are often talked about by skeptics of the digital cash system, but some U.S. lawmakers seem convinced they wouldn’t be able to implement a Bitcoin ban.
So, what are the real threats to Bitcoin? MIT’s Cory Fields and former Blockstream CTO Greg Maxwell—both of whom have contributed heavily to Bitcoin’s development over the years—recently shared their thoughts on the matter in separate forums.
Maxwell, who can often be found correcting people who are wrong about Bitcoin-related things on various subreddits, recently shared his view on one of the most pressing issues facing Bitcoin today in response to another Reddit user’s question about 51% attacks. After explaining why Bitcoin’s voting process for ordering transactions is necessary in the first place, Maxwell shared his view that 51% attacks may get more attention than they deserve.
“I think people obsess far too much about ‘51%’— it has some kind of attractive mystery to it that distracts people,” wrote Maxwell. “If you’re worried that someone might reorder history using a high hash-power collusion— just wait longer before you consider your transactions final.”
According to the Blockstream co-founder, a social attack vector where the rules of the Bitcoin network are changed in favor of a more centralized model is a much bigger risk to the system.
“A far bigger risk to Bitcoin is that the public using it won’t understand, won’t care, and won’t protect the decentralization properties that make it valuable over centralized alternatives in the first place,” wrote Maxwell. “[A] risk we can see playing out constantly in the billion dollar market caps of totally centralized systems. The ability demonstrated by system[s] with fake decentralization to arbitrarily change the rules out from under users is far more concerning than the risk that an expensive attack could allow some theft in the case of over-eagerly finalized transactions.”
It should be noted that Maxwell’s concerns are not theoretical. In the past, proponents of two Bitcoin forks, Bitcoin Cash and Bitcoin SV, have declared their altcoins to be the true version of Bitcoin. That said, neither of those networks gained much traction in terms of being considered the “real Bitcoin” by cryptocurrency users.
Of course, this sort of attack could also pop up in the form of an altcoin that starts from scratch with a much more centralized model and overtakes Bitcoin’s network effects to become the world’s preferred form of digital money. For example, the innovations enabled by Bitcoin, such as its uncontrolled monetary policy and censorship-resistant transactions, would likely become useless if everyone decided to move over to Facebook’s Libra cryptocurrency, which is likely to be much more easily controlled and regulated by governments.
Introducing a New Bug
Like Maxwell, Fields does not view a 51% attack as the most likely way in which the Bitcoin experiment could fail.
“My answer though is that the most likely sudden death scenario for a cryptocurrency like Bitcoin is an accidental bug that gets introduced internal to the system,” said Fields during a recent talk at the 2019 MIT Media Lab Cryptoeconomic Systems Summit.
Fields’s concerns are also not theoretical, seeing as critical bugs have been found in these sorts of systems in the past.
“There was a Bitcoin Cash bug that I found and disclosed and it kicked off a discussion about responsible disclosure in these systems and how to do it generally,” said Fields during his talk. “I was a little smug for a few months until we were effected by a similar bug in Bitcoin Core which potentially would allow for money printing out of thin air.”
At the end of his talk, Fields reached out to other Bitcoin developers to work with him on a ten-year plan for making it less likely that these sorts of bugs will find themselves in consensus-critical Bitcoin software again in the future.