Is the crypto that bitcoin uses 100% safe? In the sense that there's no backdoors and no ability for any entity to seize funds?
As far as anyone that has spoken publicly has indicated, there are no backdoors. In reality, it is impossible to know for 100% certainty that the algorithms chosen don't have any intentional weaknesses. It might help to consider that nobody has ever demonstrated a workable weakness in a properly generated address. Given the financial incentive that exists, if there were any intentional weaknesses, you'd think someone would have used them by now (and/or that someone would have discovered them by now). It also might help to know that there are three separate cryptographic functions between your private key and your address (ECDSA, SHA256, and RIPEMD160). Therefore, even if there's a weakness in one (or two) of those algorithms, it would require that all three algorithms be significantly broken before someone could gain control of bitcoins sent to a properly secured address.
- Can all crypto used in bitcoin be 100% trusted? If so, what are the arguments for this?
100%?
Nah. There's always a chance that someone will discover some weaknesses in any cryptographic function. However, the odds against it are so astronomically small, that you're better off worrying about other things in life.
- Who made the crypto- algorithms that is used in bitcoin? If these are made by govt. entities is it not reasonable to expect that there's backdoors? If not, why?
IIRC, the United States NSA designed SHA-256, the concept of ECC was introduced by Neal Koblitz and Victor S. Miller, Certicom came up with the parameters of the Secp256k1 curve, and RIPEMD was developed by Hans Dobbertin, Antoon Bosselaers and Bart Preneel at the COSIC research group at the Katholieke Universiteit Leuven.
- Forgive me my limited understanding, but given you assemble the brightest minds in maths and crypto, as the government funded agencies do, would they not be able to come up with sneaky solutions that would not be detected by independent crypto researchers?
You'd have to assume that all of the "brightest minds" in the world would choose to cooperate with world governments in a conspiracy that spans a few decades. There are a lot of talented mathematicians in the world. It seems likely to me that one of them would eventually figure out what's going on. It isn't possible to hide the actual math that is happening.
a Ie. could a crypto-method be declared safe, and yet contain some kind of backdoor?
It could. Given the financial incentives and the number of "experts" looking at it, it seems highly unlikely.
- Would govt. agencies create unbreakable crypto?
To the best of their abilty? Yes.
And if so why, as it could also be used against themselves.
Anything that they can break, can be broken by someone else. If they want something to be secure, then they need it to be "unbreakable".
But this is a two edged sword as safety (protection from prying eyes) could only be ensured if the crypto is unbreakable, because if entity A can break a crypto algorithm, so can entity B.
Exactly.
Let's assume that Satoshi's invention is genuine and we have nothing to fear, that's fine - however if the opposite is the case, and we know how important it is to control the money of a state, could it happen that the one who controlled bitcoin would also control its users? Comply, or else you will lose your coins.
Except it wouldn't be "Comply, or else
you will lose
your coins" would it? As soon as it was clear that they could "control" the movement of the value, all bitcoins would essentially lose any value they have. So, it would be "Comply, or it will become evident to the world that bitcoin isn't secure and
EVERYONE that is holding any bitcoins at all will lose
ALL value".
It would not only be a monetary loss if coins could be controlled remotely, but also a severe confidence blow to the entire network.
Exactly. On the other hand, they don't really need it to be insecure at all. All they need is for
you to be insecure. Then they can gain access to your private keys. Malware on your computer, surveillance, social engineering, any (or all) of these can be used to trick you into giving up the necessary information much more easily and much more cheaply than trying to "break" all the algorithms used to secure bitcoins.
For example, they could create a service (like blockchain.info) that encourages users to reuse the same address for multiple payments. Voila, they no longer need to crack SHA-256 or RIPEMD-160. Suddenly the ECDSA public key is available for them in the blockchain. This reduces their effort to just having control over the Secp256k1 curve.
Better yet, they could create a service (like Coinbase) that encourages users to turn complete control over the private keys to the service. Voila, they no longer need to crack any cryptography at all. You've just handed over complete control of your bitcoins without even realizing it.
So in short, what guarantees does any business or private entity have that his coins are indeed secured by math and untouchable by man?
There are no guarantees in life. But you have the choice to trust that the government will do a good job of managing the value of the fiat currency that you hold, or trusting that any intentional weaknesses in the cryptographic functions would have been discovered by now. I know which of those I'm more likely to put my faith in.
