The race to save bitcoin encryption – hype or real threat?

First of all we need to explain how important encryption is. Encryption is what makes communicating between electronic devices possible. Without it, emails, web pages, the bank app on your phone would all cease to exist as we know it.

A recent Wall Street Journal article discusses how scientists are creating computers that are so powerful they could easily crack ANY method of encryption used today.

Is the threat real or hype? How would it effect Bitcoin?

The new computing methods involve quantum computing. You can read the article for full details but a quick analogy is this. Current computers with their processors and circuits are as powerful as a bomber from WW2. The new computers would be as powerful as a modern stealth fighter with modern nuclear bombs.

So how does that effect Bitcoin? Bitcoin is basically digitally encrypted information. What makes the blockchain great at keeping track of where bitcoin is and keeps that BTC safe is the encryption.

It would take the most poweful computers we currently have many years to crack the encryption on the blockchain. Just like a single WW2 bomber wouldn’t be very succesful attacking a country.

A quantum computer could crack current encryption in just a few hours. Just like a single modern stealth fighter with nuclear bombs could destroy an entire country.

Why Bitcoin will survive when others don’t.

There are a lot of new options and suggestions for new ways to encrypt data. While that sounds great, that is also the problem.

Encryption is important to more than just bitcoin. Banks use it for sending financial data. Governments use encryption for storing sensitive information. Corporations use it to protect everything from email to what our online buying history is. The issue is for their encryption to work they would all have to agree on a new standard for everyone to use.

Banks and governments and Google and Amazon and Apple and Microsoft would all have to use the same standard for encryption or the cannot “talk” to each other. Lets use Amazon as an example.

If they don’t agree on the same way to communicate using the same encryption standard Amazon wouldn’t be able to show their ads on your laptop or cell phone. If you bought something Amazon couldn’t access your credit card or ask your bank to be paid. Amazon couldn’t send an email to your Google email confirming your purchase. Amazon couldn’t send a message to the government telling how much tax they collected.

It will take years for all those governments and corporations and services to agree on one way to do things. Then it will take years longer for everything to be updated so they can all talk to each other.

What makes Bitcoin different and better is that bitcoin doesn’t need everyone to agree. The blockchain works on a 51% standard.

The basic explanation is that once the bitcoin programmers release a code change, everyone who has a bitcoin node (the computers that do the mining and keep track of transactions) has a chance to decide whether to update their code. Basically it is a digital vote.

When a bitcoin node updates its computers with the new code the blockchain network sees that they are using the new code. Each computer using the new version of code is a yes vote for that update. If a computer continues using the old code the blockchain knows theyare still on the old version. They count that as a no vote for the new version.

Once 51% of computers update their code, it automatically becomes the standard. The computers with the old code can no longer connect to the blockchain network. This means that computers with outdated and bad encryption cannot put the network at risk.

Every node keeps a copy of the blockchain. The network may temporarily slow down but the updated computers will still be capable of completing all the blockchain transactions.

Bitcoin will survive. It may even come out as the only securely way to transfer money until everyone else agrees on a solution. Bitcoin programmers won’t have to convince corporations or governments to act. They will just update their computers.

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