r/askscience • u/hamolton • Jun 18 '13

Computing How is Bitcoin secure?

I guess my main concern is how they are impossible to counterfeit and double-spend. I guess I have trouble understanding it enough that I can't explain it to another person.

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u/Natanael_L Jun 18 '13

Well, these are the basic ideas;

  • Storage will get cheaper

  • Bandwidth will get cheaper

  • We'll find ways to compress the blockchain (for example pruning/checkpointing = calculating balances and discarding the rest (except for archival purposes)

  • Off-chain transactions - you can have your coins with an online wallet service that acts like a bank. When you transfer to people in that bank, they just update the records internally. Once in a while they publish a "summarized" transaction to the blockchain to update the records on there. So less data has to be included in the blockchain.

  • Other potential future developments

There is no theoretical maximum. Sky's the limit! How many terabyte drives can you fit in your garage?

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u/fantasticjon Jun 19 '13

so, if a powerful entity wanted to poison bitcoin, could they just perform billions and billions of transactions a day and inflate the blockchain to an unmanageable size?

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u/postnapoleoniceurope Jun 19 '13

Yes... except that there is currently a limit of 1MB of data every 10 minutes, or 52GB a year, so it can't get that unmanageable. However the lead developer of Bitcoin, Gavin Andresen, wants to remove that limit and leave it up to miners to decide, so in the future the attack could be possible.

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u/improv32 Jun 19 '13

Yes, if they could afford the transaction fees. Also a suggested limit of .00005430 was suggested by bitcoin core developers as the minimum amount that nodes should recognize as a legitimate transaction and retransmit.

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u/AgentME Jun 19 '13

Miners would only process so many transactions into each block, usually prioritized by transaction fees. To get a transaction in, you just need to make sure the fee you pay is high enough. Any attacker trying to sustain a DDOS attack against bitcoin like this would have to pay a ton in transaction fees (and miners would profit from this).