Bitcoin Network and Security
A question I get asked a lot by people who have never invested in crypto is:
- Can’t someone just hack the network and create a bunch of bitcoin?
The answer to that question is a simple – No. Explaining that answer is a bit more involved.
The bitcoin network itself has never been successfully hacked, despite what the media wants you to believe. Exchanges and services built off the bitcoin blockchain have, but the bitcoin network itself has never.
Successful hacks on exchanges, such as Mt. Gox have occurred on multiple occasions. This is why I preach getting money off exchanges and onto soft and hard wallets. However, you do not need to worry about getting hacked through the bitcoin network.
What makes it secure
As discussed once before, the bitcoin network is a decentralized one. This factor is a big reason it is secure. There is no central point of failure or to attack. Even if an individual’s machine were hacked the bitcoin network would continue on as the blockchain is on thousands of machines across the world.
You can check how many nodes (copies of the blockchain) are out there by using sites like https://bitnodes.io/
In addition to decentralization the bitcoin network also uses cryptography to ensure the data and chronological order of the blockchain. To hack this is basically impossible as it would take every supercomputer in existence and more than a million years.
Generating new bitcoins (also called mining) is secure too because a distributed consensus system using complex algorithms is used to confirm transactions broadcast to the bitcoin network.
Dedicated hardware is needed to successfully mine bitcoin and the numbers of miners is large and spans the globe. This also plays into the decentralization as no single miner (or group) can shut down the bitcoin network.