1.13 Can bitcoin network be hacked?
In this lesson, we discuss why it is nearly impossible to hack the bitcoin blockchain.
You may have come across several news stories pinpointing how hackers stole millions worth of Bitcoins. However, these cryptocurrency heists never refer to the actual Bitcoin network getting hacked. Bitcoin leverages blockchain technology and cryptographic techniques that allow the network to be hack-proof. Since the inception of Bitcoin, the network has proven itself as a robust technology against all sorts of failures and hacks.
In this lesson, we discuss why it is nearly impossible to hack the Bitcoin blockchain.
- Is it possible to hack Bitcoin?
- Can the Bitcoin network be shut down?
Is it possible to hack Bitcoin?
When we say hacking Bitcoin, multiple things come into the picture. There are individual addresses, the blockchain network, and the wallets to store Bitcoin.
Let’s look at the three different ways a malicious actor can or cannot compromise Bitcoin or its network.
- Hacking individual addresses
- Hacking the Bitcoin network or 51% attack
- Hacking the Bitcoin wallets
1) Hacking individual addresses
If your private keys to Bitcoin fall in the wrong hands, they become vulnerable.
Public and private keys are long alphanumeric strings. Finding out the keys through guesswork and mathematical calculations is not only time-consuming but also quite expensive.
A malicious actor can access Bitcoins by guessing the public and private keys with the brute-force attack technique. This technique involves guessing every possible combination of numbers and alphabets.
However, it is very difficult to guess the keys because there are possibilities of nearly 2256 or 1077 private keys. That is a huge number of probable outcomes. Putting things into a better perspective, the number of grains in the sands of the whole world is estimated to be 1020. Imagine how difficult it is to guess the private keys.
The analysis suggests that hacking the individual Bitcoin address is almost impossible.
2) Hacking the Bitcoin network (or) 51% attack
It is a well-known fact that the Bitcoin network is difficult to hack because of its underlying technology. Blockchain technology records and registers all Bitcoin transactions. It creates a searchable database of all the transactions in one place.
As the blockchain is decentralized, the information is not stored in one server. The transactional data exists across a vast network of computers, and they constantly verify the validity of the data, which makes hacking the Bitcoin network harder.
Let’s say that you want to access the data stored in a single room which is safeguarded by a security guard. It may be hard, but you only need to bypass the one security guard who protects the locked door.
Now, let’s imagine that the complete information is distributed across 100 rooms, each of which is safeguarded by different security personnel. This means that now you have to bypass 51 guards in order to retrieve the data you need. Sounds much more difficult, right? The same is the case for the Bitcoin network.
It is nearly impossible to compromise the Bitcoin network without having 51% of the computing power of the whole network. This concept is known as a 51% attack. It is not only difficult but also a very expensive process.
The core security feature of Bitcoin is it consumes a lot of energy. A malicious actor needs to gather the majority of the network’s total computing power to authorize the data. This 51% attack is practically impossible and highly expensive. So, the network also cannot be hacked.
3) Hacking the Bitcoin wallets
Most of the incidents you hear on the news are about hackers getting access to a user’s Bitcoin through wallets. Since there are several loopholes - from storage of coins on an unsecured exchange to leaving your laptop unprotected, there can be several reasons how a bad actor can access your Bitcoin wallet.
If any exchange stores Bitcoins or other cryptocurrencies in hot wallets, they remain vulnerable to hacks. At the same time, secure cryptocurrency exchanges like zondacrypto store users’ cryptocurrency funds on cold wallets so that no third-party can access them.
However, it is important to note that all the past hacking incidents have been pertaining to Bitcoin wallets and never about the Bitcoin network.
Can the Bitcoin network be shut down?
If not compromised, can the Bitcoin network be shut down ever? Well, not really, and here’s why.
The Bitcoin network has been operating uninterrupted for more than a decade, with millions of nodes across the globe. No central entity or government can shut it down because of one of its unique features, decentralization.
It might be difficult to trade Bitcoin in certain parts of the world, but no one can actually stop it. Fighting off Bitcoin would be similar to refusing the internet. People can remove themselves from Bitcoin, but they cannot shut the whole network down.
This material does not constitute investment advice, nor is it an offer or solicitation to purchase any cryptocurrency assets.
This material is for general informational and educational purposes only and, to that extent, makes no warranty as to, nor should it be construed as such, regarding the reliability, accuracy, completeness or correctness of the materials or opinions contained herein.
Certain statements in this educational material may relate to future expectations that are based on our current views and assumptions and involve uncertainties that could cause actual results, performance or events to differ from those statements.
BB Trade Estonia OU and its representatives and those working directly or indirectly with BB Trade Estonia OU do not accept any liability arising from this article.
Please note that investing in cryptocurrency assets carries risks in addition to the opportunities described above.
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