Bitcoin Can Be Hacked

In the cryptocurrency space, we have the community, the fans, the supporters, as well as skeptics and detractors. While it is very true that there's nothing that will make detractors give up the wrong notions they hold, it's important we try to unveil the fallacy of these notions for the sake of the skeptics.

One of the things that bitcoin prides itself on, is that it's very secure (and as claimed by some in the community, unhackkable). As expected, the detractors and some quite honest skeptics have spoken against the notion, claiming bitcoin is very much hackable.

Now, both schools have a certain logic behind want they believe, but before getting into it, let's look at some basic knowledge about bitcoin.

Bitcoin is a cryptocurrency, and like all cryptocurrency, it is a medium of exchange created and stored electronically on a blockchain using encryption techniques such as cryptography the creation of it units, as well as the verification of its transfer or any transaction involving it.

The blockchain is a decentralized ledger of all transactions across a peer-to-peer network. This network is distributed across different geographical regions and are called nodes. The blockchain removes the need for a central approval body for transaction to take place. The blockchain acts as both the central bank issuing the currency and the database recording all transactions that takes place using that currency.

Most people in the cryptocurrency world believe the main principle of the blockchain is decentralisation per se, but that's not true. If it was all about decentralisation per se, the network would strive to be more efficient and less wasteful of resources by using a division of labour mechanism, in such a way that every node or group of node known as pools deals with a specific part and function in the network.

In terms of records, we could have each node or pool record a certain segment to make sure if something were to happen we don't lose it all, but we know this is not the case. The real underlying principle of the blockchain is duplication of records. The whole theme of decentralisation is about that of duplicating the record of all the transactions on the blockchain at every node. This is what actually makes the network decentralised.

No, You Can't Hack Bitcoin

Each node is set up using expensive mining equipments and require a good amount of power for it to run. As of today, there are more than 10,000 active (trusted) nodes on the bitcoin blockchain. The duplication of records on these nodes is what guarantees the security of the network as only what the majority agree on gets recorded on the network. The only way to attack the network, is to carry out what is called a 51% attack, which refers to a situation where only one person or a group of people can successfully own, operate or control more than 50% of the active nodes on the network, giving them majority power, with which they can compromise the records on the blockchain.

This effectively means for anyone to have a chance at hacking this network, one will have to do one of the following :

Set Up Nodes That Will Equal More Than 100% Of The Current Nodes On The Network

I have stated before that each mining equipments needed to set up a single node is quite expensive, not to mention the power cost of operating it. Do you even want to imagine the cost of setting up over 10,000 nodes? I'm sure you don't. It's an enormous capital outlay for a venture that isn't even certain, because any attempt to compromise the network or make false records will be vehemently opposed by the trusted nodes on the network. It is economically impossible to do.

Find A Way To Take Control Of More Than 50% Of The Current Nodes

This in itself is impossible as these nodes are distributed across different countries. Quite frankly, this is one of the reasons for miners reward on the network. If they are constantly rewarded to keep the network secure, why would they compromise it? How on earth could you possibly meet with the owners of more than 50% of the network? We are talking thousands of people in hundreds of different countries.

Even if it could be done, these miners have been rewarded over the years and own thousands of bitcoin of their own, and they known any hack on the network can effectively rewrite a block which will delete and compromise all the block after it. This will result in loss of thousands, if not millions of bitcoins, of which they will probably be the most affected, why on earth will any miner agree to something like that?

The decentralisation and incentive system put in place for the bitcoin blockchain has effectively rendered it unhackable. This is the whole truth.

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