Entrepreneurs have built some substantial companies around Bitcoin, yet the network itself remains too fragile for widespread adoption. If the world's population tried to use Bitcoin tomorrow, the sys
Entrepreneurs have built some substantial companies around Bitcoin, yet the network itself remains too fragile for widespread adoption. If the world's population tried to use Bitcoin tomorrow, the system would collapse. Bitcoin Core, the main software, hasn't even left beta.
Most Bitcoin users treat the blockchain as an unbreakable, perfect ledger. That's wrong. Matt Corallo, a co-founder of Blockstream, spoke at the SF Bitcoin Developers Meetup about the game theory underlying Bitcoin's operation. He kept returning to one point: the system is fragile.
"Bitcoin is this interestingly fragile system — that works," Corallo said during the talk.
Bitcoin relies on mining incentives to keep the network honest. These incentives have held so far. But Corallo pressed the point that this doesn't make Bitcoin bulletproof. "As someone who's interested in computer security, cryptography, and stuff, I want a 128-bit security proof that says that Bitcoin will never fail with my money, that I'm going to be safe, my money will always be there and no one will take it, and I'm actually going to be able to use this system. But it's very, very far from that."
Most engineers view Bitcoin as a technical marvel. The actual breakthrough lies elsewhere. Satoshi Nakamoto designed incentive structures that reward miners for playing by the rules. Without those incentives, nothing stops miners from attacking the network.
Bitcoin doesn't come with built-in security. Corallo made that clear: "Bitcoin is almost hilariously fragile when you compare it to most other financial systems, but it provides very unique properties that nothing else has. I'm not going to stand here and try to be alarmist. I want to state this so that people really understand that this system is not something that is fundamentally secure and we can just go off and do whatever we want to it."
Bitcoin isn't technically secure. The incentive structures hold the network together in practice, at least for now.
Changing anything about Bitcoin risks breaking those incentive structures. Corallo put it bluntly: "It's hard; it works based on a lot of minor details and fairly delicate incentive structures. If you go and try to remove the currency or if you change the way to currency works, oftentimes it's very easy to break it."
This fragility explains why Bitcoin Core developers move cautiously with code changes. Corallo, who also works on Whisper Systems, is pushing a solution through sidechains, a proposal aimed at making protocol upgrades safer and faster.
