Whether one is investing, gambling, or collecting Bitcoin, one must secure it and ensure it is authentic. Many people worry about the value of Bitcoin but could not tell if their Bitcoins are real. Said people are more concerned about the value fluctuating. If Coinbase says ₿5, it must be ₿5, right? That is wrong. The correct assumption should be that Coinbase is reading its Bitcoin ledger(s) and hoping the Consensus Protocol has not been hacked (virtually impossible) or purposely (real threat) modified.
This is important because as long as an entity/group controls more than 50 percent of the Bitcoin ledger, said entity (single or group of people) can update everyone’s Bitcoin ledger(s) automatically. That is, your Bitcoin will have been transferred, and there is nothing you can do. Of course, it is very difficult (and seemingly impossible), and most people do not comprehend Bitcoin’s Consensus Protocol. It also does not help that investors treat Bitcoin (and many cryptos) as an asset only as opposed to a technological asset. For example, this is a quote from Forbes.com, by Billy Bambrough: “Just because there are mining operations in China, it does not mean that hardware can be seized,” Samson Mow, chief strategy officer at bitcoin development company Blockstream, told the BTC Times.
It gets better as more nontechnological people give their expert financial opinions on technologically- dependent assets. This one is from Investopedia, by Jake Frankenfield. “A 51% attack refers to an attack on a blockchain—most commonly bitcoins, for which such an attack is still hypothetical—by a group of miners controlling more than 50% of the network’s mining hash rate or computing power.”
Of course, the 51% attack is a colloquial term for attacking the Bitcoin Consensus Protocol. As technological experts, WeCcode engineers understand (and want everyone to understand) that the purpose of such protocol is to protect the network from malicious hackers and to solve problems with competing chains.
The reason that such attack is not hypothetical is because around 81 percent (circa 2021) of mining pools exist in China. So, a 51% attack is not only possible, it is inevitable. Now, if Bambrough’s aforementioned comment were complete, it COULD be possible that China WOULD not take everyone’s Bitcoin by force. Undoubtedly, the Internet makes it possible to take data without physical access or confiscation. Obviously, one would either need to have the secret keys, e.g., passwords, biometrics, MFA, etc., or brute force the system. To be clear, as previously mentioned, brute forcing the Bitcoin ledger is virtually impossible. For that reason, accurately writing about the security risk of Bitcoin due to brute force is about as possible as creating a time machine. As for having the secret keys, it is like the metaphorical cliché of having the keys to the castle. Back to point, China passed an encryption (密码法) law January 2020 that gives the country such power. “As it is, the law may offer only superficial protection in light of existing rules. China regularly conducts mass surveillance on digital [conversations] and can force companies to both store data locally as well as turn it over on request.” With that said, Bitcoin (based on its limited supply of 21 million) has the potential to be worth hundreds of thousands of dollars or a lot more.
The security risks, in this case, are confidentiality, integrity, and availability. Such risk is the highest level of risk in cyberspace and for cyber security. All security experts know that no system should be used if a person, or group of people, has not been properly authenticated. The question is how valuable will Bitcoin be before trust is questioned?
