Serious questions that people have about Cryptocurrencies

[AgnosticBoy]

A lot of people are skeptical of cryptocurrencies. I think a lot of the doubt can be narrowed down to the 3 questions below...

1. Can Bitcoin be hacked?

2. Can the Bitcoin programmers just shut off Bitcoin and run away with everyone's money?

3. Can anyone just create their own currency? To date, there are probably thousands of different cryptocurrencies out there, and that number is likely to keep growing. Why or how would these currencies be worth anything? What gives them value?

I have a good idea about the answers to questions 1 and 3, but I'm wondering about question #2.

I will take the journey to find the best answers to these questions and post them here. Anyone else is welcome to join and share their answers!

 

[AgnosticBoy]

1. Can Bitcoin be hacked?

Here's one good answer (Remember, Bitcoin is built on blockchain technology):

They can.

But the thing they get after hacking won’t be Bitcoin. It will simply be something else; which nobody else but them is using.

That’s the beauty of blockchain.

The Bitcoin in your wallet (which is in the blockchain) is there because millions of computers around the world say so.

If millions of computers around the world say “Andy has 1 Bitcoin”, then Andy has 1 Bitcoin. If one computer among them says “Nope, Andy has 100 Bitcoins”, then the other computers in the network are going to say “We have no idea what you’re talking about. Those 100 things Andy has are not Bitcoin”.

Good luck getting millions of computers to say “Andy has 100 Bitcoin”. In addition to that, you’ll even have to create a history dating back to 10 years worth of Bitcoin transactions that happened all around the world, showing how those 100 Bitcoins ended up in Andy’s wallet.

Doing all of that is impossible and way too much work; because those millions of computers corroborating Bitcoin's transaction history is owned by millions of different unrelated people like you and me.

This is why Bitcoin cannot be hacked.

Source: Quora

 

[AgnosticBoy]

2. Can the Bitcoin programmers just shut off Bitcoin and run away with everyone's money?

Here's one answer:

No one controls Bitcoin — like the internet​

No one owns it. No one has ultimate power over it. No one can take control of it, or shut it down, or change it to suit their own purposes. This doesn’t mean those things are impossible, but that no single person or group has the power to do them.

As the Bitcoin website FAQ explains:

‘Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can’t force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.’

This is one of Bitcoin’s most significant features. It’s also one that’s often forgotten.

Bitcoin is often compared to the internet which also isn’t controlled by anyone. Like the internet, it’s managed by its surrounding ecosystem, including:

• Users (people who buy, spend, sell, and store Bitcoin)
• Miners (who process transactions, mine new Bitcoin, and keep the network running)
• Developers (who work on improving the network)
• Companies and their shareholders (like Luno, who enable users to access Bitcoin and keep it safe).

One key benefit of decentralised systems is that they have no single point of failure. This doesn’t mean they’re indestructible. However, it means they’re very difficult to attack. It’s like the story of the Hydra — a monster with numerous heads that grows more when they’re cut off.

Source: https://medium.com/naspers/who-controls-bitcoin-506672b1150e and Bitcoin FAQ (Who controls Bitcoin?)

So from what I gather, no one can shutdown Bitcoin just as no one can shut down the entire internet. Although, I'd imagine that governments can cut access to the internet by turning of power or electricity.

The following is also good to know regarding Bitcoin:

Why do people trust Bitcoin?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

Source: https://bitcoin.org/en/faq#what-are-the-disadvantages-of-bitcoin