Many people who love bitcoin have developed a quasi religious belief in bitcoin. They believe that no matter what happens, bitcoin will survive. The huge computing power and scattered nodes all over the world mean that bitcoin system has high stability and can resist any possible threat. Most people who are not familiar with bitcoin tend to think that bitcoin will eventually fail. Just like any digital product, it will be broken by hackers one day.

Once you understand how the bitcoin system works, you will know that it is impossible to "hack" bitcoin directly. However, there are still some potential threats to bitcoin. After all, computer security is a never-ending race. Attackers hiding in the dark are always looking for new angles. Below we will analyze only the most frequently mentioned threats.

1、 Hacker single point fraud

In order to blackout bitcoin, that is, to mess up the transaction ledger, fraudulently transfer some bitcoin to a specific account, or make the bitcoin ledger unavailable, a node needs to submit an invalid block on the blockchain, and let the network accept the invalid block, so that the blockchain can continue to extend after the invalid block. However, in the bitcoin system, the cost of verification fraud is very low, while the cost of submitting blocks is very high and continues to rise (it must cost a lot to get an effective solution to obtain the right to add blocks). At the same time, the common interest of most nodes in the network is to keep bitcoin alive. Therefore, in this struggle, the attacker's probability of winning is really slim. As the cost of submitting blocks continues to rise, the probability of an attacker winning becomes increasingly slim.

2、 51% computing power attack

51% attack is a way of attack. The attacker uses a lot of computing power to generate two payment transactions for the same bitcoin. Finally, one of the transactions fails to cheat the payee. If he takes the lead to complete a large amount of work in a short period of time, he can prove that. The miner can send a bitcoin transaction a to the blockchain, and let transaction a be packaged into the bitcoin blockchain, so that the payee will think he has received the money. At the same time, it can also fork out the bitcoin blockchain in front of the block containing transaction a to build a fork chain containing transaction B to transfer the same bitcoin to another address. Because the miner has a lot of computing power, once the length of the branch chain exceeds the original chain, the attack will succeed, and the bitcoin received by the payee of transaction a will disappear.

Computing power is a highly competitive global market. Bitcoin mining is the largest, most profitable and fastest growing computing power use scenario in the world. Attackers may calculate how much computing power they currently have in order to get 51% of the computing power, and then invest the corresponding cost to buy mining machines. However, this kind of large-scale purchase will only lead to a sharp rise in the price of equipment, which will benefit the existing miners and invest more capital in the mining industry. Wantonly purchasing will also lead mining machinery manufacturers to increase investment, reduce the price of unit computing power, and increase the total computing power of the whole network. As an outsider in a market, the attacker keeps buying computing power, but he is always at a disadvantage because computing power that does not belong to him grows faster. Attackers, especially those with the support of a country, may try to control (confiscate) the existing mining equipment, and use these equipment to attack the system, so as to reduce the security of bitcoin network. However, this strategy needs the cooperation of governments all over the world. The reality that bitcoin mining is highly distributed geographically makes this strategy face great challenges.

3、 Install hardware back door

Another way to disrupt or destroy the bitcoin network is to destroy the hardware devices running bitcoin software so that they can be intruded. For example, in the mining node to install hard to detect malware, so that outsiders can manipulate the hardware. When 51% of attacks occur, these devices may be shut down or remotely controlled. Another possibility is to install spyware on the user's computer to obtain the user's private key so as to control the user's bitcoin. If such attacks spread on a large scale, it will seriously hit the credibility of bitcoin as an asset and reduce the demand for bitcoin.

The most important defense against these attacks is the anarchy and cryptopunk orientation deeply rooted in the hearts of bitcoin enthusiasts, which makes them think that verification is better than believing. Bitcoin enthusiasts are usually more technically competent than the general public, and will be very careful to check the software and hardware they use. Open source peer review is also an important barrier to deal with such attacks. Due to the distributed characteristics of bitcoin network, this kind of attack usually only causes a heavy loss to a successful individual, and causes a temporary chaos to the system at most, but it is almost impossible to cause the paralysis of the whole network.

4、 Breaking SHA-256 hash algorithm

SHA-256 hash algorithm is an essential part of bitcoin system. In short, the input of hash process can be any data, and the output is a fixed size string through irreversible mathematical calculation. In other words, it can easily generate the hash value of any data, but it can't reverse the original data from the hash result. However, in theory, if the computer's computing power rises to be able to crack these hash functions, all bitcoin addresses will face the risk of being broken.

We can't predict whether or when this scenario will happen, but once it happens, it will pose a serious technical threat to bitcoin. Bitcoin's solution is to replace it with a stronger encryption algorithm. However, the difficulty of replacing the encryption algorithm lies in how to coordinate most nodes to give up the old consensus rules and switch to the new consensus rules using the new hash function.

5、 Return to sound currency

The most feasible means of attack is to reduce people's economic motivation to use bitcoin. The demand for bitcoin stems from the needs of people all over the world. People need to make some transactions that bypass political control. People need to have anti inflation means of value storage. As long as the political authorities prohibit and restrict the transfer of people's funds, as long as the government currency is a soft currency that can be issued at will according to the wishful thinking of politicians, there will be a demand for bitcoin. The slowing supply will make the value of bitcoin continue to appreciate, attracting more people to use bitcoin to store wealth.

Assuming that the world's banking and monetary systems return overnight to the gold standard at the end of the 19th century, and that personal freedom and hard currency are the supreme principles, the demand for bitcoin may be greatly reduced. In a world where the government's desire to control everything and inflation are strictly limited by the gold standard, the first mover advantage and relatively stable purchasing power of gold will constitute an insurmountable obstacle for bitcoin. It is difficult for bitcoin to have a large number of users quickly, so it will not be able to grow to a large enough volume to obtain any form of stable price.

(2021-4-8)