Bitcoin has withstood the largest and most technically sophisticated attacks likely ever perpetrated against any known technology. Billionaires who control large scale mining operations suddenly removed their miners from the Bitcoin network and directed their hashrate at a competing altcoin – then they proceded to spam the Bitcoin network with millions of bogus transactions, clogging the mempool. Mining attacks have been attempted including 50% + 1 attacks, brute forcing of the SHA256 space and countless other attacks we’ve probably not even heard of. Heck, there’s even a formal project aimed at finding SHA256 private keys (which has found a few collisions already).
Then came the media attacks. The world’s biggest banks sent their academics and CEOs on a blitz to publicly discredit Bitcoin, call it a fraud, a ponzi scheme and spread general FUD on large scale using mainstream financial media. They damaged Bitcoin’s reputation but were unable to stop it. Some comments caused an big dip in Bitcoin prices, but soon after they were caught buying Bitcoin themselves and prices recovered once people noticed what was really going on.
And then came the financial attacks. Banks suddenly reduced the level of milia criticism and appeared to be joining the movement when, suddenly, billions of BTC were dumped and the prices collapsed. As with every large correction in BTC prices, the death of Bitcoin was proclaimed by some. FUD took over, small investors who risked their saving went desperate. Financial regulators suddenly attacked, subpoenaing large crypto exchanges. The financial system’s war was on and still is.
But Bitcoin still stands.
Technical, media and financial attacks have not been able to deter Bitcoin although admittedly they did plenty of damage and slowed adoption quite a lot. If it weren’t for the banking system’s and the media attacks, Bitcoin could probably be worth over $100k by now.
Now there is a new (old) threat looming in the horizon. The net neutrality debate has suddenly returned to the spotlight. Bitcoin is a P2P network which depends on unrestricted network connections between nodes. Attacking this requirement means attacking the very core of Bitcoin: decentralization.
What happens if large ISPs and backbone providers suddenly start to block or severely slow down Bitcoin traffic? What if they charge extra for cryptocurrency traffic? Full Ethereum nodes, for example, have become notoriously slow to sync. Whereas in mid 2017 it took 24 to 30 hours to sync a full Ethereum node, with the explosion of smart contracts this time has turned into days or even weeks. In some cases finding network peers has begun to take hours. Is this the beginning of a new attack on cryptos?
Traffic shaping is very difficult to detect and to prove. Technical users can surely verify net neutrality using a variety of available tools, but for the rest of us it’s practically impossible to differentiate a truly slow network from one that is somehow artificially slowing down a particular service’s traffic. Other P2P networks such as BitTorrent have been the target of traffic shaping, why wouldn’t Bitcoin be the next?
This real and immediate threat has not gone unnoticed. Bitcoin evangelist Andreas Antonopoulos has discussed the issue on a recent video:
According to Mr. Antonopoulos the net neutrality issue is real, but it will not be a show stopper for blockchain. He points out that VPNs and similar tunneling technologies can and will be adopted immediately to make it look like cryptocurrency traffic is going to some other service which is allowd by the ISP. But it is agreed that the end of net neutrality will pose nasty problems for broadband access in the US and abroad.
We could take a more conspiratorial path and perhaps even suspect that the recent revival of the net neutrality debate could perhaps have been fueled by the financial sector with cryptocurrencies in mind. As you can see here, there is a close financial relationship between the media and major ISPs. These form two of the three attack vectors we discussed early on in this article (technical, via the network, and midia attacks). We know that the ISPs exercize a lot of influence over policymakers, and we also know that the financial sector has immense influence over the media.
Why wouldn’t banks leverage their influence over the media and ISPs to combat what they perceive as a disrupive technology? It makes perfect business sense to – unless there is community backlash and bad press. (Last time they did not seem to care about bad press.)
Cryptocurrencies are at a strategic inflection point. So be ready for the next battle: attacking the network infrastructure is the next logical step in the legacy banking system‘s war on crypto.