bitcoin is one of the most robust distributed systems in human history. For fifteen years, it has moved forward block by block with only two outages in its early years that were handled very quickly by responsive developers the moment they manifested. Other than that, it has continued to produce a block approximately every ten minutes without interruption.
This reliability has set a gold standard of expectations for bitcoin users, encouraging them to see it as a completely unstoppable system. In many people's minds, bitcoin has already won, and the world is just realizing that. “bitcoin is inevitable,” as many would say.
This doesn't mean that bitcoin is literally unstoppable; There are potential events that could cause massive damage or network disruption if they occur. Today we'll go over some of these examples and see how they would likely play out.
Government intervention
bitcoin represents a serious conundrum for governments around the world in multiple ways. First, it functions as a system that allows global payments to flow from one user to another, regardless of borders or financial controls.
But while governments cannot prevent the overall bitcoin system from continuing to function, they can introduce regulations that impact its participants. To truly disrupt the bitcoin network, governments would have to go after miners who actually add new blocks to the blockchain to keep the system moving forward.
This was done before, in 2021, when the Chinese government banned bitcoin mining. Nearly 50% of the network's hashrate went offline as Chinese miners began migrating to the rest of the world.
The network continued to function.
In the worst case scenario, the Chinese government could have imposed confiscation of mining hardware. That would have left the PCC in control of all those miners, which could have been used to participate in a 51% attack In the net. But that didn't happen. Even if the confiscatory approach had been adopted, rather than simply imposing a mining ban, it would have been highly unlikely to have succeeded in attacking the network given the complexity of the coordination between collaborators.
For example, one of the places where large amounts of hashrate migrated to was Iran. At the time, many rumors circulated that miners were bribing Iranian military officials to get their machines through customs in the country.
If governments attempted to confiscate mining equipment and close borders to prevent the equipment from being shipped internationally, the possibility of bribing government officials or smuggling it illegally is very real, given the financial incentive to do so. For such a seizure event to present an existential risk to the network itself, a government would have to be able to seize more than 51% of the network's active hashrate. All it would take is for a small enough percentage to cross borders to ensure that what remains to be confiscated does not exceed that 51% threshold and that the network remains secure.
As the hashrate becomes even more decentralized around the world, the possibility of such an action creating a risk to bitcoin itself continues to reduce. While it remains a possibility, the more governments that must cooperate to achieve such a measure, the less likely it will occur. bitcoin's resilience shines, as evidenced empirically by CCP's actions in 2021.
Power grid failure
bitcoin miners cannot function without electricity. After all, they are computers, so that is an obvious reality. This presents a huge risk to miners who rely on power generation and delivery infrastructure.
Many natural disasters can cause power outages and network problems. Hurricanes, wildfires, and extreme weather events such as cold snaps can disrupt electrical infrastructure. A prime example of such events affecting hashrate was seen in Texas during Winter Storm Uri in 2021. However, the scale of these events does not directly pose a systemic risk to the bitcoin network. Texas losing power, even with ~30% of the network's hashrate located within the state, would not bring down or destroy the bitcoin network.
As demonstrated in 2021 during China's mining ban, even with ~50% of the network's hashrate taken offline in an incredibly short period of time, the network continued to function. Yes, the lock time interval increased dramatically and induced a huge increase in transaction fees confirm transactions quickly, but the network itself continued to function and process transactions without interruption.
Even if we imagined an event on a much larger scale, such as a massive solar storm that knocked out power to half the planet, the other half would still have electricity running. Miners located in that half of the world would continue to mine, continue to confirm transactions, and the network would continue to function well in half of the planet. Even people in the half of the world without power, as long as they have kept a physical backup of their seed phrase, will still have access to their funds when power is restored or they can head to a location with a working grid.
It would be necessary to cut power to virtually the entire planet to truly kill bitcoin; otherwise it will continue to chug along in a corner somewhere until the energy comes back online and can “regenerate” itself by expanding again throughout the world.
Internet disruptions
While the Internet is made up of decentralized protocols similar to bitcoin, the actual underlying infrastructure is primarily owned by large multinational corporations and governments (again similar to bitcoin infrastructure, such as miners). Ownership of this infrastructure is still relatively distributed among many actors globally, but it does not have the same degree of distribution as a highly decentralized system like a mesh network.
There are still quite large choke points and bottlenecks that, if disrupted or attacked, can cause massive degradation of reliability and functionality. Almost everyone connects to the Internet through an Internet Service Provider (ISP); This market is dominated in most of the world by a handful of large suppliers in a given region. There aren't many options between providers, and this represents a huge bottleneck for people interacting with the Internet. If an ISP filters or denies your access and there's no other provider to choose from, you're in trouble.
Similarly, your ability to talk to someone on the other side of the world is due to larger “backbone” networks run by large corporations and undersea fiber optic cables along the ocean floor. These cables are highly centralized choke points for communications between different countries and continents. If operators were to start filtering the information passing through them, or if someone were to physically cut the cables, it could cause a massive disruption to global Internet traffic.
So what could actually be done if any of these things happened? If an ISP started leaking bitcoin traffic to users, people's nodes would be disconnected from the network. Broadcast transactions may be impossible, depending on how harshly the ISP filters traffic. But the rest of the network would continue to advance. There are services like Blockstream satellite streaming, and a bitcoin transaction is such a small piece of data that any momentary connection to an unfiltered network would be enough to transmit your payments.
Even larger-scale disruptions to connections between countries or regions amount to a simple irritation in the grand scheme of things. Let's say a country like Russia had its Internet connection to the outside world completely cut off. If Russian miners didn't close, the blockchain would fork on two separate chains because miners inside and outside Russia would not receive each other's blocks. Each time that connection was repaired, any group of miners that had mined a longer chain simply “overwrote” the shorter one, erasing the transactions that took place on the other shorter chain.
There is also a high possibility that such a chain split may not even occur in such a situation. Blockstream Satellite Service offers a way for people, even without the Internet, to continue receiving blocks in real time from the rest of the network. This, in combination with satellite uplinks (which are not as easy to block), or even radio relays, could allow Russian miners to continue mining a single blockchain with the rest of the network during an outage.
Once again, bitcoin's resilience can find a way.
Ending
bitcoin is not literally invincible or unstoppable, but it is incredibly resilient to network disruptions or adversarial attacks. It was literally designed to work this way. The goal of decentralized networks is to be robust against threats and disruptions, and bitcoin has been surprisingly successful in that design goal.
The world has seen and will continue to see incredibly massive destructive events. Whether that involves climatic or cosmic events, acts of sabotage or intentional war, or simply old government regulations, bitcoin has already survived many of them. Most likely, it will continue to survive whatever comes its way in the future.
It is not invincible, but it is resistant. The type of event or disaster that would be needed to permanently take bitcoin offline would be destruction on such a massive scale, that in the unlikely event it occurs, we will all have problems much bigger than bitcoin going down.