One major attribute of the Blockchain is the safety of data. Encryption is the most effective way to achieve data security. How crucial is this phenomenon for the future of Bitcoin?
To read an encrypted file, you must have access to a secret key or password which enables you to decrypt it.
AES-256 encryption can be broken
Following findings by students at the University of Toronto, huge integer numbers can be factored more quickly than previously thought possible, meaning encrypted files can be broken into as little as ‘100 hours compute time.’
In a publication, it states that ‘AES-256 Encryption Can Possibly Now Be Broken After New Method To Speedily Factor Integers Greater Than 128 Bits Found Mathematics Dept./Computer Science Dept.”
Cointelegraph asked experts what this could mean for Bitcoin and the Blockchain in general.
Bitcoin security is beyond just algorithms
Blockchain Scientist at Loyyal, Christopher Franko says that currently Bitcoin only uses AES-256 when encrypting wallet data files. However, a new algorithm can be substituted to Bitcoin as a softfork, assuming that someone, someday, finds a way to break SHA-256, or ECDSA.
Franko says to Cointelegraph:
“To the end user this would appear as a new address type and users would send their Bitcoin to the newly generated address of the new address type. Ethereum has talked about using another solution to this problem: abstracting key generation in such a way that anyone could have the freedom to create any type of key they wanted as long as it followed some guidelines.”
He concludes by saying that this opens up the ability to use harder-to-break and quantum resistant algorithms, as breaking encryption algorithms isn’t the end, it is just a stepping stone in the history of cryptocurrency.
The halving of Bitcoin is more important
Rendering his opinion, Blockchain expert, Thomas McAlister insists that security in the context of public knowledge is too hard to comprehend.
McAlister says that the focus should be on the fact that Bitcoin can halve:
“If this is the case, then why can’t all commodities halve ( i.e. soft commodities, in principle silver, gold etc).”
He continues by explaining that intrinsic value is one thing, but regarding cryptocurrencies, Bitcoin halves every 4 years. “Why are they exception to the rule under federal law? The Bitcoin category in USA is a commodity and in Australia it is classed as an asset.”
McAlister also points out that while Bitcoin is making headway in the payment space, it can only service the actual value of exchange. eg. X billion bitcoin = Y billion US.
“If this is true, then it would suggest that if the market turned overnight Bitcoin may not be liquid in the market as the security, and no one will be liable for the cost loss. Another tough luck scenario.”