A Bug in the Bitcoin Code
So far we have explored the risks to the mass adoption of Bitcoin from the perspective of what governments can do to stop it’s growth. There are also internal risks within the protocol. This blog post will discuss an always present existential risk to Bitcoin; a bug in the code. Hundreds of developers all over the world are constantly researching and adding improvements to the Bitcoin protocol. There is an extensive testing phase in place to avoid any issues. The proposed changes are first added on the “testnet” before they are added to the live Blockchain. With that being said, there is always the possibility of a bug slipping through the cracks and affecting the network in a negative way.
There has been bugs in the past but these were in the early days when very few developers were working on Bitcoin full-time. Bitcoin not only survived each one, but thrived. The most common and devastating bug is known as an inflation bug. This is when a rogue actor can create Bitcoin out of thin air and inflate the hard-capped supply to greater than 21 million. Since one of bitcoin’s strengths is it’s scarcity and supply cap, any increase to the 21 million can cripple the protocol.
Bugs Erode Confidence in the Protocol
Bugs can be devastating because they erode user confidence in the protocol. Money is built on confidence. We use fiat currencies today because we are confident that people will accept my Canadian dollars anywhere in Canada and that the system or the rules of the game will not change overnight. If for example, governments decide to make massive changes to their fiat currency systems, it will affect the value of the currencies. This happened in India when the government decided to ban the two highest denomination notes. This had a negative impact on the economy as poorer, rural communities that relied on physical cash for commerce suddenly had worthless paper instead of valuable money. Their confidence in the system was eroded. Similarly, if some sort of unforeseen change occurs in the Bitcoin protocol, it could erode confidence and destroy the prospects of mass adoption in the future.
Chances of a Bug Getting Through are Low
The chances of a bug getting through to the live Blockchain and affecting it negatively decrease every day. More and more developers are actively involved in the project. Outsiders routinely review the code for bugs and patches are made extremely fast. If by some chance a bug does slip through the cracks, the community has some options as well. The community as a whole can decide to roll back the Blockchain to before the bug affected any transactions and restart from there. This is only a last resort if the damage done is absolutely catastrophic and there are no other options. Another option is to simply live the results and let Bitcoin recover organically. This is the best option if the bug was minor and didn’t affect the protocol at scale.
Bugs at the base layer are definitely a possibility but the chances get slimmer and slimmer each day. If by chance something does happen, we believe the community will band together and pick the right course of action that will continue to help Bitcoin prosper into the future.