Crypto’s Worst Nightmare

Highlights

• US$2.7 trillion essentially lives on the internet in the form of cryptocurrency. Bitcoin – the world’s largest crypto – alone has a tad under US$1.2 trillion with tens of millions of active holders.

• The concept of the entire internet shutting down isn’t impossible. Remember, the guys who built the Titanic thought she was indestructible.

• It is possible that smaller portions of the internet could be temporarily shut down due to localised catastrophes. In fact, not only is this possible, but it’s also already happened.

Here’s a scary thought. What if the entire internet went down? Not in your house. Not in your suburb. Rather, what if the world’s internet crashed?

Last month, the world lost its mind when Facebook (now called Meta) went down without warning, leaving users hanging for several hours. Disregarding those users who were forced to hold off on posting the latest Joe Biden meme, there were people whose businesses relied on Facebook’s service and were put out of pocket due to the media giant’s sudden crash.

Now consider that US$2.7 trillion essentially lives on the internet in the form of cryptocurrency. Bitcoin – the world’s largest crypto – alone has a tad under US$1.2 trillion with tens of millions of active holders.

What would happen to the Crypto World if Internet breaks down?

People like to tout Bitcoin as “digital gold”, a replacement as a reliable source of value. However, gold can be held. There are vaults full of gold across the world. Crypto exists digitally, which means it only exists if the internet exists.

How Valid is This Fear? 

The good news is that the internet doesn’t have one giant on/off switch. The internet, by definition, is an interconnected network of countless other networks. Therefore, the internet is almost indestructible.

Even if multiple networks were to crash, so many backup systems exist, which are activated instantly and automatically if the system was to fail.

That being said, the concept of the entire internet shutting down isn’t impossible. Remember, the guys who built the Titanic thought she was indestructible. Tell that to Jack, who’s skeletal remains lie somewhere at the bottom of the Atlantic Ocean (seriously, there was extra room on that raft, Rose).

It would take an inconceivable catastrophe, like a meteor hitting Earth, to destroy the entire internet, which, at that point, getting onto Instagram to post a firsthand video of the said disaster, would be the least of any survivor’s concerns.

In fact, there would be no survivors because, in truth, for the internet to crash, it would take such a catastrophe that there would be no life remaining on the planet.

Image Source: © Ipopba | Megapixl.com

Other Scenarios  

However, it is possible that smaller portions of the internet could get temporarily shut down due to localised catastrophes. In fact, not only is this possible, it has already happened.

There are around 400 undersea fibre optic cables connecting continents, which are often cut by natural phenomena like undersea earthquakes or artificial catastrophes.

But, if this were to happen, it wouldn’t shut down the whole internet. It could potentially isolate continents from one another.

Perhaps a more disturbing possibility pertains to the vulnerability of the internet's address book system. Any mass outage could potentially magnify the effect of physical disruptions to root servers.

This means if a large part of the internet were to go down for an extended period of time, the “backup system” could get terminally confused, thus confusing new data with outdated information. This would mean that computers would be unable to communicate with each other thus rendering the internet unusable.

What Would Happen to Crypto? 

So, if computers were hypothetically unable to communicate with each other, this would be a slight inconvenience for cryptocurrencies as crypto networks distribute transactions on ledgers across countless computers in just one network.

The good news there is, such an event would have no impact on the content of the ledgers in the respective blockchains. Once the problem was fixed, the contents of a person’s crypto wallet would remain unaltered as the computers would verify copies of the register for consistency.

A likely result of such an event would more realistically be the lowering in user’s confidence in digital currency as a reliable holder of value. The knock-on effect of this would likely be a drop in the value of cryptocurrencies across the board.

Is It a Matter of Concern?  

Although disturbing to think about, the event of the internet shutting down and thus disrupting crypto, although disturbing to think about, is unlikely to happen. But theoretically, it is possible. However, much like natural disasters or any sort of apocalyptic fears, this fear is, by and large, out of our hands. Therefore, it would be wise to categorise it as “cross that bridge when we come to it” and try not to keep you from sleeping at night.