Cryptocurrency & Security: The Jackpot Question
From rag to riches, cryptocurrencies have something of the “Slumdog Millionaire” story, so here is one jackpot question for “Bitcoin Jamal”:
Since the computational complexity of functions used in cryptocurrency systems is assumed (and not proven), are these systems not at the mercy of mathematical breakthroughs that could threaten trillions of dollars of digital assets in the future?
Cryptography Is A Science
Decentralized ledgers are ticking almost all boxes right. However, we often hear enthusiasts and some experts saying that “these systems are unbreakable [sic]”. Cryptography being a science, they are disregarding the fact that the computational complexity of problems such as integer factorization or discrete logarithm are assumptions.
In other words, these systems are less at risk from growing computational power — argument often used to “prove” the security strength — than they are from mathematical assumptions being challenged or disproved. In the case of Bitcoin, the assumption is the computational complexity of the Elliptic Curve Discrete Logarithm Problem (ECDLP). An algorithm solving ECDLP in polynomial time could exist; there is no proof that the problem is intractable.
Cryptographic systems are provably secure, not once and forever, but under the assumptions of our Times. The Copernican revolution ended centuries of Ptolemaic beliefs, Einstein’s general theory of relativity superseded Newton’s law of gravitation two centuries apart and, we could wake up to a world where a new definition of entropy would reform the entire information theory. But let’s get back to our topic.
A Run On The Blockchain
If ECDLP was put to obsolescence, what would happen in such a blockchain-based decentralized environment?
Early birds may be able to cash-out before the rest wakes up to the news; some opportunists may steal as much as possible before they also cash-out. Everyone would then want to cash out — we’d have the first blockchain run in human history!
I might mention that such issue is already at play with EMV cards. Our credit card would also be compromised if its private key could be computed by a fraudulent card reader exploiting a breakthrough in mathematics. However, there are 2 major differences:
- Cryptography is not a foundation pillar for fiat currencies. It would be disruptive but not essentially destructive.
- The systems are centralized so banks could prevent card transactions immediately.
Can we devise decentralized ledger systems that could handle such contingency? Is there a need for central components regardless to implement suspension of convertibility and derail a blockchain run? Could artificial intelligence and neural networks help blockchains in implementing consensus protocols that would not just be based on cryptographic functions?
The blockchain technology is burgeoning — so much innovation already. We should however understand the essence of the fundamental pillars. Again, cryptography is a science — not a belief.
“D. It is written.”
Spoiler warning: Slumdog Millionaires’ Jamal and Latika have let the answer to the jackpot question in the hands of destiny.
My 2 satoshi.