3 Ways that Bitcoin could fail
In episode 6 of the Go Full Crypto podcast, we briefly discussed what would cause Bitcoin to fail. It turns out that Bitcoin is extremely secure and robust. It is very difficult, if not impossible for the world to stop running the bitcoin network. This post is about about exploring the unlikely. What would possibly cause Bitcoin to fail? Bitcoin is typically hailed for its amazing, and simple approach to security. It’s use of cryptography, and game theory make it difficult for even the most intelligent computer wizards to hack. But contrary to popular belief, bitcoin isn’t completely bulletproof. We’re going to explore three ways that Bitcoin could fail.
1: Environmental Disaster
There are certain environmental disasters that could take place that would potentially throw the bitcoin network out of sync. If for some reason the internet connection between North America and Asia were disconnected, we could see a permanent and irreversible split in the bitcoin network. In order for that to happen, radio towers, satellites, and underwater internet cables would all need to be inaccessible for a long period of time.
One disaster in particular may actually be able to accomplish this to one degree or another. Solar Flares are a phenomenon that humans have experienced in the past, but never at a time where we’ve had computers running every aspect of our lives. The truth is that even the experts in this field have blind spots as to the wide sweeping implications of a solar flare. A large enough solar flare could potentially wipe out an entire continent’s electronic devices.
A world-ending disaster such as the explosion of a super volcano may be powerful enough to send humans into another ice age. This would make maintaining electrical network very difficult to accomplish on a global scale. The best case for the survival of bitcoin is the computers located in nuclear bunkers. Technically only one computer running the bitcoin network needs to survive. When humans emerge from the ice age decades later, at least they will have good money.
2: Massive Coordinated Government Attack
Imagine every government on earth getting together to coordinate a single attack on bitcoin. This would be the single greatest demonstration of unity amongst nations the world has ever seen. In order to pull it off, the government would need to know the location of every single computer running bitcoin, in the whole world. We live in a hyper connected civilization, so let’s pretend for a moment that this is possible. A massive army would be required to pull off this simultaneous attack. Then, the government would need to put everyone who was running the bitcoin network in jail. Otherwise, they could just build a new one. I don’t think we will ever need to consider this scenario, simply on the basis of countries agreeing on something. If they can’t pull together massive movement on issues like global warming, how would we expect them to take down bitcoin?
3: People Lose Interest
This is my personal favourite way that bitcoin fails. Mostly because I think it is the most likely. Money is a belief system. It only works if the people that are using it believe that the money has value. If every single person lost interest in bitcoin at the same time, then the bitcoin network would die. The same is true for the American Dollar. If everyone in America started using bitcoin in favour of the USD, the value of the money would plummet.
People are always looking for the latest and greatest thing. Sure Bitcoin is an improvement on government money. But what happens when something better than Bitcoin comes along? There are already thousands of different cryptocurrencies. Each of them offering their own spin on money or value. If people completely lose interest in bitcoin, in favour some other cryptocurrency, then maybe we will all just forget about Bitcoin.
Listen to the podcast episode below on What Will Make Bitcoin Fail.