Bitcoin is one of the most powerful decentralized systems in human history. For 15 years, blockchain progressed block by block, with only two outages in the first few years. These outages were handled very quickly by developers who reacted the moment they occurred. Aside from that, it’s ticking along without interruption, generating blocks roughly every 10 minutes.
This reliability sets the gold standard of expectations for Bitcoin users, encouraging them to view Bitcoin as a completely unstoppable system. In many people’s minds, Bitcoin has already won, and the world is catching up to that realization. As many people have said, “Bitcoin is inevitable”.
This does not mean that Bitcoin is literally unstoppable. However, there may be events that, if they occur, could cause significant damage or disruption to the network. Today we’ll look at some of these examples and see what the results might be.
government intervention
Bitcoin presents serious challenges to governments around the world in many ways. First, it functions as a system that allows global payments to be made from one user to another, regardless of borders or financial controls.
However, governments cannot prevent the entire Bitcoin system from continuing to operate, but they can introduce regulations that affect participants. To really disrupt the Bitcoin network itself, the government would need to track miners who are actually adding new blocks to the blockchain to ensure the system can continue to evolve.
This was before 2021, when the Chinese government banned Bitcoin mining. As Chinese miners began migrating to other parts of the world, nearly 50% of the network’s hashrate went offline.
The network continued to function.
In a worst-case scenario, the Chinese government could confiscate mining hardware. This would give the CCP control over all miners, allowing them to participate in 51% attacks on the network. But that didn’t happen. Even if a confiscatory approach had been taken rather than simply enforcing a mining ban, the likelihood of a successful network attack would have been very low, given the complexity of coordination among collaborators.
For example, one of the places where a large amount of hashrate moved was Iran. There were many rumors about miners bribing Iranian military officials to get their machinery through customs and into Iran.
If a government attempts to seize mining equipment and closes its borders to prevent the equipment from being transported internationally, the possibility of bribing government officials or smuggling it out illegally is very real, given the financial incentives to do so. For such a seizure event to pose an existential risk to the network itself, the government would need to be able to seize more than 51% of the active network hashrate. Only a small percentage is needed to sneak across the border to ensure that the remaining amount to be confiscated does not exceed the 51% threshold and the network remains secure.
As hashrate becomes more distributed globally, the likelihood that these actions pose a risk to Bitcoin itself continues to decrease. Although it remains a possibility, the more governments that have to work together to implement such measures, the less likely it is that such an event will occur. Bitcoin’s resilience shines through, as empirically proven by the actions of the Chinese Communist Party in 2021.
power grid failure
Bitcoin miners cannot operate without electricity. That’s an obvious reality, because they are computers after all. This poses a significant risk to miners who rely on power generation and delivery infrastructure.
Many natural disasters can cause power outages and power grid problems. Extreme weather events, such as hurricanes, wildfires, and cold snaps, can disrupt power infrastructure. A prime example of such an event affecting hashrate occurred in Texas during Winter Storm Uri in 2021. However, the scale of these events does not directly pose a systemic risk to the Bitcoin network. A power loss in Texas would not disrupt or destroy the Bitcoin network even though 30% of the network hashrate is located within the state.
As seen during the 2021 Chinese mining ban, the network continued to function even when up to 50% of the network’s hashrate went offline in an incredibly short period of time. That’s right. To quickly confirm transactions, blocktime intervals were drastically increased and large spikes in transaction fees occurred, but the network itself continued to operate and process transactions without interruption.
Even if we imagine an event on a much larger scale, such as a massive solar storm knocking out power to half the planet, the other half would still be able to operate. Miners located on half the planet will continue to mine, continue to confirm transactions, and the network will function normally across half the planet. Even people in half the world without power can access their funds whenever power is restored or moved to a place where the grid is functioning, as long as they maintain a physical backup of their seed phrases.
To really kill Bitcoin you would essentially have to turn off power to the entire planet. Otherwise, it will continue to be chased away in a corner somewhere until the power comes back online and it can “regenerate” itself and expand around the world again.
internet outage
The Internet is structured around a decentralized protocol in a similar way to Bitcoin, but the actual infrastructure on which the Internet is based is mostly owned by large multinational corporations and governments (similar to the Bitcoin infrastructure, such as miners). Ownership of this infrastructure is still relatively decentralized across many players globally, but not at the same level of decentralization as a highly decentralized system like a mesh network.
There are still significant bottlenecks and bottlenecks that, if interrupted or attacked, could significantly reduce stability and functionality. Almost everyone connects to the wider Internet through an Internet Service Provider (ISP). The market is dominated by a few large providers in most regions of the world. There isn’t much choice between providers, and this is a huge gateway for people interacting with the Internet. If your ISP filters or denies your access and you don’t have another provider to choose from, you’re in trouble.
Likewise, the ability to talk to someone on the other side of the world is thanks to larger “backbone” networks operated by large corporations and underwater fiber optic cables along the ocean floor. These cables are highly centralized gateways for communication between multiple countries and continents. If operators start filtering the information passing through them, or if someone physically cuts the cables themselves, global Internet traffic could be significantly disrupted.
So what can you actually do when one of these things happens? When ISPs start filtering Bitcoin traffic for users, people will disconnect from their nodes on the network. Depending on how strictly your ISP filters traffic, broadcasting transactions may not be possible. But the rest of the network will continue to shuffle. Services like Blockstream’s satellite feed exist, where Bitcoin transactions are pieces of data small enough to broadcast a payout if they momentarily connect to the network unfiltered.
Even large-scale disruptions in connectivity between countries or regions are mere annoyances in the grand scheme of things. Let’s say a country like Russia completely loses its internet connection to the outside world. If Russian miners are not shut down, the blockchain will split into two separate chains, as miners inside and outside Russia will not be able to receive each other’s blocks. Whenever that connection is restored, the group of miners who mined the long chain simply “overwrites” the short chain and deletes the transactions that occurred on the other short chain.
It is also likely that such a chain split will not occur under these circumstances. Blockstream’s satellite service provides a way for people to continue receiving blocks in real time from the rest of the network, even if they don’t have internet. Combining this with a satellite uplink (not easy to block) or wireless relay would allow Russian miners to continue mining a single blockchain along with the rest of the network even during an outage.
But once again, Bitcoin’s resilience may find a way.
finish
Bitcoin is not literally invincible or unstoppable, but it is incredibly resilient when faced with disruption or adversary attacks on the network. It’s literally designed to work this way. The whole purpose of a decentralized network is to remain robust in the face of threats and disruptions, and Bitcoin has achieved remarkable success in that design goal.
The world has experienced and will continue to witness destructive events of incredible proportions. Whether it involves weather phenomena or cosmic events, intentional acts of sabotage or war, or simply outdated government regulations, Bitcoin has already survived a lot. It will likely continue to survive whatever is thrown at it well into the future.
Not invincible, but resilient. In fact, the type of event or disaster it would take to permanently take Bitcoin offline would be destructive on such a massive scale that even if that were to happen, we would all have far bigger problems than if Bitcoin just stopped functioning. no see.