Bitcoin’s Attack Vectors: Sociopolitical Attacks
Until now, we’ve examined Bitcoin attack vectors that take place at the protocol level – Sybil/eclipse attacks and 51% attacks, which involve an adversary commandeering resources to cripple the network/specific nodes in some way.
Of course, there are other forms of non-technological attacks that could be mounted to damage the Bitcoin network. In this article, we’ll take a look at some of them.
The ‘Guilt by Association’ Fallacy
Terrorists use Bitcoin, therefore Bitcoin is bad.
Drug dealers use Bitcoin, therefore Bitcoin is bad.
Nazis use Bitcoin, therefore Bitcoin is bad.
The mainstream media and uninformed individuals get a lot of flak when it comes to their portrayal of Bitcoin, but for what it’s worth, I think a lot of their coverage should be enjoyed for what it is – sensationalist fiction.
Critcism that may seem laughably absurd to those in the fringe group of cryptocurrency enthusiasts, however, could hinder adoption significantly. Though Bitcoin is completely agnostic, in that it’s a permissionless system available to anyone (irrespective of intent), tarring it as ‘money for criminals’ will serve only to delay widespread uptake.
As it stands now, many are of the opinion that the media is fighting a losing battle with arguments attacking the wastefulness of PoW, the consequences of immutable file storage and a lack of uniqueness that would allow anyone to copy-paste the protocol and replace it — let’s not forget the classic ‘Bitcoin is a Ponzi scheme’, either.
Fundamentally, it’s doubtful that virtue signalling is going to stand between a miner with resources to burn and the ability to easily monetise it. More of an issue, on the social front, would be a scenario where, after mass adoption, the majority of users decided that they wanted to remove the 21m supply cap.
Enter the State
Even if governments made an attempt to clamp down by outlawing Bitcoin, what exactly are they going to do? If sanctions were effective, there would be no such thing as black markets. Difficulty and price may drop, on/off ramps may dwindle and merchants/individuals may cut their losses and rid themselves of their holdings, but all of the traits that make Bitcoin valuable are still there for those wishing to transact underground.
Besides, it’s a bit late in the day for regulators to be retracing their steps and pivoting on their demonstrable tolerance for the cryptocurrency – the US are still flirting with the idea of Bitcoin ETFs and, in recent developments, the state of Ohio has begun to accept Bitcoin for taxes.
That said, Bitcoin in itself is an attack on fiat, and it would be naive to assume that those wielding power would happily roll over and allow it to cannibalise currencies from where said power stems. It really isn’t out of the realms of possibility that a nation state (or a consortium of these) may choose to sponsor an attack that cripples the network (i.e. a 51% attack). Remember, they’ve got magical printing machines that allow them to create fiat and thus bankroll miners. Barring the desire to bribe said miners, they could additionally take over mining farms by force.
Alternatively, a state-sponsored actor may also choose to attempt to sneak a critical bug into the Bitcoin Core client. Given that bugs have been overlooked in the past, it would be foolish to assume that a talented team couldn’t build up a reputation over time by working on the protocol, before slipping a Bitcoin-breaking bug past the scrutiny of the developers.
Is it a Problem?
Yep. It’s definitely not optimal. We do have recourse in the form of hardforks (switching the mining algorithm or rolling back the chain), though it’s unclear whether consensus for this would be overwhelming – it may be that the attack, at the point that it’s executed, is supported by a number of pseudo-Bitcoiners that want governments to be able to blacklist/reverse transactions (consider the micro-example of the ETH/ETC split).
In my opinion, the elusive state-sponsored attack is the most dangerous. It will be the quintessential test of antifragility. Of all the would-be attackers, governments are best equipped to attempt the likes of a 51% attack or the introduction of a covert bug. Standalone social vectors aren’t really a major issue, but could be exploited to polarise citizens towards supporting the War on T̶e̶r̶r̶o̶r̶ D̶r̶u̶g̶s̶ Bitcoin.
Time is probably the best deterrent, provided it results in better distribution of mining and ossification of the software (in favour of development on subsequent layers). Moreover, if businesses and central banks begin to accumulate Bitcoin, they’ll have a vested interest in protecting their investment by ensuring that no single entity is able to take control of the ledger.
If you enjoyed the BAB/BSV ‘Hash War’, you’re going to love the China/US one…
This is the third article in a series on Bitcoin attack vectors. Have a read of the first one on Sybil/eclipse attacks and the second on 51% attacks.
Cover art by the author, photo from Pexels.
