Investigation into Bitcoin’s Network Vulnerabilities
A recent investigation conducted by the Cambridge Centre for Alternative Finance has shed light on the vulnerabilities within Bitcoin’s network, particularly regarding its reliance on underwater cables and routing systems. The research, led by Wenbin Wu and Alexander Neumueller, marks a significant advancement in understanding Bitcoin’s resilience to physical disruption. While decentralization is a key feature of Bitcoin, its functioning is heavily dependent on the underlying internet infrastructure.
Impact of Submarine Cable Disruptions
Using a cascade model, the study explores the possible implications of severing submarine cables that connect various countries. One encouraging finding is that random disruptions to these underwater cables would have minimal impact on the Bitcoin network; between 72% and 92% of cables would need to be cut for the network to experience serious fragmentation, defined as over 10% of nodes being disconnected.
However, the landscape changes dramatically when considering purposeful attacks. If an adversary were to specifically target critical cables known for their high connectivity, the threshold for failure drops significantly, with just 20% of these key cables required to provoke network issues. The research identified 11 crucial cables linking Europe and North America.
Risks from Targeting Autonomous System Networks
In addition, targeting the top five Autonomous System Networks (ASNs)—including major providers like Hetzner, OVH, Comcast, Amazon, and Google Cloud—could potentially dismantle up to 95% of Bitcoin’s routing capabilities on the clearnet, highlighting a substantial risk.
Embracing the TOR Network
Interestingly, as threats to the network have evolved, Bitcoin has increasingly embraced the TOR network for routing. From a mere handful of nodes utilizing TOR in 2014, projections indicate that by 2025, up to 64% of Bitcoin nodes will use this privacy-focused network. Critics have often voiced concerns that using TOR could introduce new vulnerabilities due to the obscurity of node locations. Nevertheless, this study suggests that routing Bitcoin through TOR may actually fortify its physical resilience.
Concentration of TOR Relay Bandwidth
Data indicates that TOR relay bandwidth is predominantly concentrated in well-connected European nations such as Germany, France, and the Netherlands, which have extensive redundancies in both underwater and terrestrial infrastructure. This concentration makes it exceptionally difficult to isolate these countries from the global internet, thereby creating a compound barrier to disruption. Consequently, Bitcoin nodes located in less connected regions can benefit from the robust physical networks in Europe, providing a layer of protection against potential threats.
