Can Bitcoin be Shutdown
Most digital products and services can be shutdown. In fact, to shutdown any digital service, one needs only to shutdown the hardware that sustains the service to turn off the delivery. This affects bitcoin since the cryptocurrency is entirely digital meaning that it is subject to the perils of digital products and services.
In theory, therefore, bitcoin can be literally shutdown, but things are not that simple. Many things would have to be in place for such to happen and even if everything were in place, it would still not be easy to shutdown Bitcoin given how cryptocurrencies function. This begs the question, how do cryptocurrencies work?
How cryptocurrencies function
Cryptocurrencies, of which bitcoin is the most popular and the most used, are based on blockchain and cryptography technologies. A blockchain is a form of distributed computing where a system is sustained by the collective computing power of all persons using the system. In computing terms, it is a peer-to-peer arrangement where control over the system is distributed across the entire network of users.
The blocks of information (blockchains) are interlinked through cryptography. New blocks can only be added by a user into the chain but changing the data in a previously appended block would require the working together of all the individual users in the system. If a system has millions of users, like bitcoin, altering the data is possible only in theory.
This shines more light on why it is very hard to shutdown bitcoin. Since the blockchain is powered in a fragmented manner where each user has a part to play in keeping the system up and functioning, to shutdown bitcoin, all the platform’s users would have to work together to make it a reality which, again, is theoretically possible but realistically impossible.
Security from third parties
One of the primary reasons for the creation of bitcoin, besides anonymity, was to come up with a currency that is devoid of external influence. The very structure of blockchain significantly discourages any entity from influencing the system.
Since influencing the denomination would necessitate the banding together of the majority of users against the currency, this is a feat no government, organization, security agency or hacker group can easily achieve considering that they are the most likely to be interested in shutting down bitcoin.
Incentive for shutting down bitcoin
When considering shutting down bitcoin, there is also the challenge of incentive. The users of any system use it because there are appealing advantages that cater to specific needs. Bitcoin meets the needs of security, anonymity, and borderless financial services.
This further spotlights how hard it would be for a third party to convince the very same people who benefit from bitcoin all over the world to come together to shut it down. It would be akin to asking a person to burn his/her house. In this case, asking millions to burn their homes – of which, the chances of such happening are nil.
Alternatives to shutting down bitcoin
That bitcoin cannot be literally shutdown does not mean that the system cannot be halted and rendered unusable. But doing so would still require extreme input and resources and the benefits-inputs equation would still be greatly imbalanced which is enough to put off anybody with such an ambition.
How to halt bitcoin
To halt bitcoin, one would have to capture over 50% of the computing power that props the cryptocurrency. This is very possible, and in 2014, such an occurrence was highly probable. Every currency has to be produced in some way and in bitcoin’s case, this is accomplished through mining.
Mining is the solving of complex mathematical puzzles by a computer, and after a solution is found and vetted by other users on the platform, the beneficiary is awarded bitcoins for his efforts. This means that profit can be made by amassing computing power that also simultaneously makes the platform more robust.
In typical human fashion, people started coming together to combine computing capabilities to increase the chances of mining bitcoins. In 2014, one pool of miners managed to briefly control 51% of the computing power that nourished the bitcoin system.
At that moment, if they wanted, the cartel could have halted validation of new blocks and reverse earlier blocks hence blocking new transactions and undoing old ones. However, the pool consisted of people who benefited greatly from bitcoin mining and any effort to hurt the system, would in reality, hurt their primary motive of generating profits.
In a nutshell, they had no incentive to bring bitcoin to its knees, and as a consequence, some of the pool members jumped ship and joined other pools bringing down the influence of GHash.IO.
The definitive answer regarding whether one can shutdown bitcoin depends on perspective. If theoretical, then yes; but realistically, the answer is a definitive no. It would be much easier to sabotage the system but as shown, that is in itself, would be a monumental feat. As bitcoin becomes more popular, pulling off such a coup becomes ever more improbable. To learn more about bitcoin and how it has taken the word by storm, explore other illuminating content pieces on bitgale.com.