Q: Is this a cyber security story or a finance risk story? A: Both, financial and cyber risks are more related than ever.
I’ve read about the reasons for owning Bitcoin, some of these were intuitive for me long before this was ever compiled. Back in 2012 when I learned about it, you could buy an FPGA miner for about $500, and have a path to profit. The price per bitcoin skyrocketed in 2013 and early FPGA miners were instantly profitable.
Since 2013 there have been many ups and downs, governments targeted it, more and more people became interested, and here in 2017 the narratives have exploded. If you are reading this, you probably know all about it.
As a professional cyber security expert I had many questions over the years, here they are:
a) How secure is the bitcoin network?
As of this writing, I’ve never heard of a successful attack against the bitcoin network that has resulted in the compromise of a computer system. I’ve heard plenty about Denial of Service attacks, but never remote code execution. If you got your computer owned by some other means, well you’re on your own. (Pun Intended)
Most of the attacks/compromises that I’ve seen have been on institutions that hold keys or do incredibly stupid things.
b) How secure is the code?
Folks who pay attention to security know that this is a question that cannot be answered with absolutes. Have people looked at the code for 0-days? I’m sure of it. Is it secure? Is windows secure? Is linux secure?
c) Can governments shut down Bitcoin?
Let’s just imagine that the code is, for all intents and purposes, generally secure. Can governments shut down Bitcoin?
Without even answering the question as to whether they WANT to shut it down, the truth is that, without equivocation, governments absolutely have the power to shut down Bitcoin, or at least destroy the market for it. Here are a couple of possibilities:
1) They could compromise the computer of a primary developer and insert a backdoor
2) They could become a primary developer
3) They could shut down all legitimate exchanges
4) They could imprison people for connecting to the illicit peer to peer network
5) They could force computer manufacturers to insert a backdoor
6) They could force operating system developers to insert a backdoor
7) They could force ISP’s to block cryptocurrency networks
8) They could turn off the Internet
9) They could do unspeakable things to crypto
AND FINALLY:
10) They could raise interest rates.