What external systems is Bitcoin commerce dependent on?

3

If there was a concerted effort to "shut it down", where are the vulnerabilities?

The potential for the Bitcoin client to communicate with other Bitcoin nodes has been discussed at length, but what about the other parts of the Bitcoin ecosystem that have we become dependent upon? If they disappear (e.g., denial of service, or taken down), will Bitcoin continue to function as a currency and payment system?

What are the most important systems that we are dependent on and how are we affected as a result if services from these systems end?

For an example of one such service -- what would be the effect if BlockExplorer.com were to be forced offline.

Stephen Gornick

Posted 2012-04-03T06:30:46.347

Reputation: 26 118

Another example, where does an e-commerce site get the bitcoin exchange rate from. How exposed is that vulnerability? – Stephen Gornick – 2012-04-03T08:15:29.257

Any dependencies for mining? I know if the top few pools were to find their network connections yanked all at once, there would be a scramble for miners to figure out a solution (e.g., a surviving pool, or go the P2Pool route.) – Stephen Gornick – 2012-04-03T18:17:11.290

Answers

6

Whereas Block Explorer might be a useful tool, Bitcoin could survive without it.

Most important parts of the Bitcoin ecosystem, asides the main client that is, are the exchanges. They give the currency its value and without them, Bitcoin would become a fringe technology (no merchants would deal in it, as they couldn't pay their taxes with it.

Then we have the mining software and to a lesser degree the hardware (FPGA boards and the like). Should those be gone or less available it would be easier to launch a 51% attack on the network.

After that there are the mining pools. If they would disappear the miners would have a harder time earning a predictable wage. This dependancy has been mitigated with P2Pool though, so the impact is smaller than it was earlier.

After that the services are less essential. Losing the Bitcoin Forum, Wiki, SE, WeUseCoins or the like might make it harder for new people to get into Bitcoin, but wouldn't make it less functional.

ThePiachu

Posted 2012-04-03T06:30:46.347

Reputation: 41 594

I just saw that StrongCoin.com, a Javascript-based wallet service uses BlockExplorer.com for service. When BlockExplorer is down so is the ability to use StrongCoin.com (though your private keys can still be accessed and used with other wallet services). – Stephen Gornick – 2012-04-04T16:53:40.940

@StephenGornick One could use a couple different block explorers or other similar nodes as a form of backup. Probably in the future the Overlay Network will do exactly that - mitigate dependency on single websites in an uniform way. – ThePiachu – 2012-04-04T20:57:05.147

If the exchanges go down, there is always person to person meetings in a coffee house. Psst...Bud... Wanna buy some Bitcoins?..... – shoeless joe – 2012-04-09T16:23:09.103

@shoelessjoe Well, it would be sort of like basing your economy on Magic cards - you know they will be worth something to someone, but unloading 1000 of them in a short amount of time will severely drop the local price and you might not even find a buyer. Coincidentally, MtGox was once Magic the Gathering Online Exchange... – ThePiachu – 2012-04-09T16:28:09.327

That would only be a liquidity event, and a localized liquidity event. People would have to not expect to sell so many at one time. If there was a $5,000 bill, I couldn't expect to go into Starbucks and get change. Thanks for your comment. I like that the full circle has been made from Magic cards and back again. – shoeless joe – 2012-04-10T19:03:55.637

Asked: 2012-04-03T06:30:46.347

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Active: 2012-04-03T08:58:54.057