Bitcoin Is Not Inherently Secure
This comment was written in response to a blog post by Fred Wilson.
Specifically, I was reacting to the common “Bitcoin’s security is inherently inpenetrable” misconception, represented in the blog post as the following statement:
“Bitcoin’s architecture is similar to the Internet’s architecture. There is no centralized control point. No single point of failure.”
Welp, yes and no. Web’s architecture is amazing, and Bitcoin’s is pretty smart, too, but no technology system is ever absolutely secure. Simply because life doesn’t deal in absolutes. Ignoring the limits of security is one sure way to get compromised.
While Internet’s architecture is indeed exceptionally resilient, it is in no way bulletproof. By now we have amassed a lot of unfortunate examples of how it can be compromised. Internet can be controlled both locally (various country-level “walls” filtering access) as well as: globally (Net Neutrality issues, compromised security protocols, back-channel access into major systems).
To put it in the words of Bruce Schneier:
If you think technology can solve your security problems, then you don’t understand the problems and you don’t understand the technology.
It’s one thing when compromised Internet means your Netflix video is slow and image quality is grained, it’s completely different when your money can get lost.
Not taking the risks that are present even in the most distributed architectures seriously is—irresponsible. There is no “purely technical” solution here. Bitcoin-like approach may be an improvement, and I am as excited about it as the next person, but I still want offline mechanisms to protect my money when all the tech fails. There is no purely technological solution for international monetary exchange. Outright ignoring all of the experience in the field, and being all radical about it is: well, somewhat childish, to be blunt about it.