Analysis & Opinions - WIRED
Bitcoin’s Greatest Feature Is Also Its Existential Threat
The cryptocurrency depends on the integrity of the blockchain. But China's censors, the FBI, or powerful corporations could fragment it into oblivion.
SECURITY RESEARCHERS HAVE recently discovered a botnet with a novel defense against takedowns. Normally, authorities can disable a botnet by taking over its command-and-control server. With nowhere to go for instructions, the botnet is rendered useless. But over the years, botnet designers have come up with ways to make this counterattack harder. Now the content-delivery network Akamai has reported on a new method: a botnet that uses the Bitcoin blockchain ledger. Since the blockchain is globally accessible and hard to take down, the botnet's operators appear to be safe.
It's best to avoid explaining the mathematics of Bitcoin's blockchain, but to understand the colossal implications here, you need to understand one concept. Blockchains are a type of "distributed ledger": a record of all transactions since the beginning, and everyone using the blockchain needs to have access to—and reference—a copy of it. What if someone puts illegal material in the blockchain? Either everyone has a copy of it, or the blockchain's security fails.
To be fair, not absolutely everyone who uses a blockchain holds a copy of the entire ledger. Many who buy cryptocurrencies like Bitcoin and Ethereum don't bother using the ledger to verify their purchase. Many don't actually hold the currency outright, and instead trust an exchange to do the transactions and hold the coins. But people need to continually verify the blockchain's history on the ledger for the system to be secure. If they stopped, then it would be trivial to forge coins. That's how the system works.
Some years ago, people started noticing all sorts of things embedded in the Bitcoin blockchain. There are digital images, including one of Nelson Mandela. There’s the Bitcoin logo, and the original paper describing Bitcoin by its alleged founder, the pseudonymous Satoshi Nakamoto. There are advertisements, and several prayers. There's even illegal pornography and leaked classified documents. All of these were put in by anonymous Bitcoin users. But none of this, so far, appears to seriously threaten those in power in governments and corporations. Once someone adds something to the Bitcoin ledger, it becomes sacrosanct. Removing something requires a fork of the blockchain, in which Bitcoin fragments into multiple parallel cryptocurrencies (and associated blockchains). Forks happen, rarely, but never yet because of legal coercion. And repeated forking would destroy Bitcoin’s stature as a stable(ish) currency....
Want to Read More?
The full text of this publication is available via WIRED.
For more information on this publication:
Belfer Communications Office
For Academic Citation:
Raghavan, Barath and Bruce Schneier.“Bitcoin’s Greatest Feature Is Also Its Existential Threat.” WIRED, March 9, 2021.
- Recommended
- In the Spotlight
- Most Viewed
Recommended
Analysis & Opinions
- Foreign Policy
The Peril of Persuasion in the Big Tech Age
Analysis & Opinions
- CNN
The Real Threat from China Isn't 'Spy Trains'
Analysis & Opinions
- WIRED
There's No Good Reason to Trust Blockchain Technology
In the Spotlight
Most Viewed
Paper
The Coming AI Hackers
Analysis & Opinions
- National Post
War Between China and the United States Isn't Inevitable, But It's Likely: An Excerpt From Graham Allison's "Destined for War"
Discussion Paper
- Belfer Center for Science and International Affairs, Harvard Kennedy School
Why the United States Should Spread Democracy
SECURITY RESEARCHERS HAVE recently discovered a botnet with a novel defense against takedowns. Normally, authorities can disable a botnet by taking over its command-and-control server. With nowhere to go for instructions, the botnet is rendered useless. But over the years, botnet designers have come up with ways to make this counterattack harder. Now the content-delivery network Akamai has reported on a new method: a botnet that uses the Bitcoin blockchain ledger. Since the blockchain is globally accessible and hard to take down, the botnet's operators appear to be safe.
It's best to avoid explaining the mathematics of Bitcoin's blockchain, but to understand the colossal implications here, you need to understand one concept. Blockchains are a type of "distributed ledger": a record of all transactions since the beginning, and everyone using the blockchain needs to have access to—and reference—a copy of it. What if someone puts illegal material in the blockchain? Either everyone has a copy of it, or the blockchain's security fails.
To be fair, not absolutely everyone who uses a blockchain holds a copy of the entire ledger. Many who buy cryptocurrencies like Bitcoin and Ethereum don't bother using the ledger to verify their purchase. Many don't actually hold the currency outright, and instead trust an exchange to do the transactions and hold the coins. But people need to continually verify the blockchain's history on the ledger for the system to be secure. If they stopped, then it would be trivial to forge coins. That's how the system works.
Some years ago, people started noticing all sorts of things embedded in the Bitcoin blockchain. There are digital images, including one of Nelson Mandela. There’s the Bitcoin logo, and the original paper describing Bitcoin by its alleged founder, the pseudonymous Satoshi Nakamoto. There are advertisements, and several prayers. There's even illegal pornography and leaked classified documents. All of these were put in by anonymous Bitcoin users. But none of this, so far, appears to seriously threaten those in power in governments and corporations. Once someone adds something to the Bitcoin ledger, it becomes sacrosanct. Removing something requires a fork of the blockchain, in which Bitcoin fragments into multiple parallel cryptocurrencies (and associated blockchains). Forks happen, rarely, but never yet because of legal coercion. And repeated forking would destroy Bitcoin’s stature as a stable(ish) currency....
Want to Read More?
The full text of this publication is available via WIRED.- Recommended
- In the Spotlight
- Most Viewed
Recommended
Analysis & Opinions - Foreign Policy
The Peril of Persuasion in the Big Tech Age
Analysis & Opinions - CNN
The Real Threat from China Isn't 'Spy Trains'
Analysis & Opinions - WIRED
There's No Good Reason to Trust Blockchain Technology
In the Spotlight
Most Viewed
Paper
The Coming AI Hackers
Analysis & Opinions - National Post
War Between China and the United States Isn't Inevitable, But It's Likely: An Excerpt From Graham Allison's "Destined for War"
Discussion Paper - Belfer Center for Science and International Affairs, Harvard Kennedy School
Why the United States Should Spread Democracy