Showing posts with label bitcoin hacked. Show all posts
Showing posts with label bitcoin hacked. Show all posts

Bitcoin Network Holds Over $1 TRILLION In Value... and it has NEVER Been Hacked! How It's Creator Knew Attacks Would Come, and How He Prepared...

Bitcoin hacked?

Many people have speculated if there could be some way to create bitcoin's out of thin air by hacking Bitcoin transactions. But these dreams remain nothing more to this day.

In the Bitcoin white paper, Satoshi Nakamoto anticipates attackers who will want to defraud the system, knowing there is always someone greedy who wants the biggest piece of the pie.

However, the Bitcoin white paper explains why it's so unlikely we will ever see a successful hack of bitcoin (or any other type of attack)...

Thirteen years after the white paper's publication, the lessons about how difficult it would be to defraud the network remain relevant.

Amazingly - Satoshi is by all accounts, gone - yet the network has become even more secure on it's own. As the number of Bitcoin miners grows larger by the day, the idea of hacking the system becomes increasingly absurd.

"By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them. The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended." - Satoshi, Bitcoin Whitepaper

This means that a hacker would need many Bitcoin miners to create the conditions that allow to deceive most of the miners that currently work on the network.

It's impossible to give an exact number, but experts estimate a hacker wanting to manipulate Bitcoin's network would need around 1 MILLION miners running modified code to even attempt it - and we're not talking about repurposed old laptops, this would require the most modern, powerful ASIC mining rigs.

How Bitcoin's Security Improves By Itself Every Day....

The network is designed to keep as many copies of the transaction history as possible so that no one can change them, the security of Bitcoin is built on cooperation, or all the computers on the network agreeing on the time and size of a transaction.

In order for a fraudulent miner to even be allowed on the network, they would need to have a valid copy of past transactions as well.  Then they could only attempt to manipulate new transactions they initiated - because the rest of the nodes would never accept a history of new transactions that did not match their own record on the blockchain.

So, the longer Bitcoin exists, the longer the list of previous blocks gets.

What About Standard 'Cracking' Methods?

One classic method of getting past digital security is as old as computers are - cracking, simply trying one password after another.

Bitcoin has this covered as well - it uses an an encryption algorithm called as 'Sha-256' which was designed by the NSA and the National Institute of Standards and Technology.

Take a look at this randomly generated private key, keep this in mind: 1E99423A4ED27608A15A2616A2B0E9E52CED330AC530EDCC32C8FFC6A526AEDD

After a Quadrillion Attempts, You Would Have Only a 0.68% Chance to Have Cracked it...

It's that long and random for a reason. 

Another way to look at this - you could have 1 million computers, each trying a different password every second, and it still could take up to 30,000 YEARS.

So, What Can We Conclude From All This?

First, I think it's safe to say if Bitcoin was to be the target of a hacker, only those with the highest skill levels stand a (small) chance. 

But those people know they would need to dedicate their life to the task - they also know that if they did, they'd still have less than a 1% chance of success.

So if you were in their shoes - would you risk most likely wasting your life by targeting Bitcoin?  Or would you simply continue to go for the countless other places large amounts of funds are stored, on systems you can actually get into?

The combination of time, costs, and odds would lead any reasonably intelligent person to conclude: it just isn't worth it. 

Satoshi once described hacking Bitcoin as new take on the 'gamblers ruin' scenario - where essentially, someone attempting to 'win' at hacking bitcoin is more likely to go broke first.

Author: Ross Davis

Silicon Valley Newsroom