I don’t have deep understanding of the technical side of blockchain programming, but the concept of Bitcoin’s blockchain is simple – it is a distributed ledger that is located in multiple places simultaneously. It means that, if someone wants to hack Bitcoin, he has to attack the majority of ledgers at the same time, which is almost impossible.
However, it doesn’t mean that hackers don’t steal Bitcoins – they do it, but not because blockchain is the problem. The problem may be in the exchanges, wallets, and other players that operate with Bitcoins. For example, if hackers attack a website, it does not mean they attack the Internet.
Mt. Gox is one of the most popular examples of how an exchange can collapse because of an attack. However, there are more examples of attacks. In reality, over 30% of the Bitcoin exchanges were subject of different forms of cyber-attacks.
Still, it is not about attacking Bitcoin.
The blockchain behind this cryptocurrency stays steady at the moment, impossible to be hacked or destroyed by any entity.
But, I distinguish three possibilities through which Bitcoin’s protection may be penetrated:
- 51% attack – in theory, if a group of miners get access to over half of the total network mining power, it can get control over the system by validating or refusing transactions. This can literally destroy Bitcoin, as the transparency and security of blockchain would be irrelevant. Such a group of miners can block any transaction or permit double spending of their coins. It still don’t give them power to generate free Bitcoins, but it would surely create a panic among users.
Is such an attack realistic? Yes – it sounds very realistic if you look at the largest mining pools in the world today:
As you can see, the five largest pools have 70% of the hash power, thought the top one has only 17% of the mining market. If these forces would join, they would easily decide Bitcoin’s direction.
- Hard fork – a hard fork can be organized to split Bitcoin and move it to another direction. For example, if a powerful group of miners and Bitcoin users would plan to make Bitcoin’s blockchain more vulnerable to monopolies, with the intention to reach that monopoly in the future, they can create a fork by changing the functions in the blockchain and attracting believers for the new change. The old blockchain version would lose demand as everyone would join the new coin.
- Attack from Quantum computers – several experts said that Bitcoin’s blockchain can be vulnerable to quantum computer attacks in ten years from now, which means that all new transactions may be hacked by then.
Dr. Marco Tomamichel, an expert in the field, :
“Many existing Bitcoin accounts and all new transactions will be at risk within ten years, so we need to start thinking about solutions now.”
And I guess there is one more possibility of attack that can trigger panic.
Do you see these six US media corporations?
Well, they control over 90% of the information in the US. If they joined together against Bitcoin, in a few weeks you would see its price totally collapse.