What happens if the cryptography of Bitcoin gets cracked?

[Rannasha]

we can fork a new version of bitcoin blockchain with the new encryption
but a lot of dedicated hardware will become doorstops

All the "dedicated hardware" is only used for part of the Bitcoin system, mining. There are other locations where cryptographic functions are used that could, in theory, be broken, such as the generation of a public address from a private key (which is supposed to be infeasible to reverse). Cryptographic functions in these parts can be replaced without making the whole stack of SHA256 mining ASICs obsolete.

As DannyHamilton pointed out earler in this thread, the md5 function is considered to be broken. In fact, the first signs of weakness in the function were known as early as 1993. And still, 20 years later, the function is not yet sufficiently broken to make it unsuitable as an alternative for SHA256 in the mining process. So with that timeline in mind, it is very likely that if a flaw in SHA256 is discovered at some point, there is plenty of time to gracefully retire SHA256 and its dedicated mining ASICs instead of a sudden "guys, tomorrow we're going scrypt!"

[cryptnutter]

If Bitcoin's cryptography got cracked, we would have a lot more to worry about than just the security of Bitcoin, that's for sure!

[ljudotina]

If people would catch on to it then Bitcoin will be hardforked and everything will resume as if nothing happened.

I totaly do not agree. If something like breaking BTC's crypto happened, trust in BTC would be crushed and BTC would receive death blow from which it would not recover. Not because it's unsafe now (software change would fix it) but there would be no trust. No trust, no users. No users, no value.

[turvarya]

If people would catch on to it then Bitcoin will be hardforked and everything will resume as if nothing happened.

I totaly do not agree. If something like breaking BTC's crypto happened, trust in BTC would be crushed and BTC would receive death blow from which it would not recover. Not because it's unsafe now (software change would fix it) but there would be no trust. No trust, no users. No users, no value.

If someone steals a lot of Bitcoin, before it gets fixed than yes. If the more likely Event occurs, that someone theorize about a method to "break" it and than a hard fork is made, before anything actually happens, than no, that would not be the death blow to BTC, the price might drop for a short period a lot of people would be happy about buying BTC at that low prices and some months later, a lot of people would be very angry about them self, when BTC returns to business as usual.

[ljudotina]

If Bitcoin's cryptography got cracked, we would have a lot more to worry about than just the security of Bitcoin, that's for sure!

Oh and this is so true...SHA256 is used for so much more than Bitcoin. If you put it to perspective, there are MUCH more valuable targets for that than Bitcoin. If it ever happens, Bitcoin will je just secondary target....just because "they can".

[Harley997]

If Bitcoin's cryptography got cracked, we would have a lot more to worry about than just the security of Bitcoin, that's for sure!

Oh and this is so true...SHA256 is used for so much more than Bitcoin. If you put it to perspective, there are MUCH more valuable targets for that than Bitcoin. If it ever happens, Bitcoin will je just secondary target....just because "they can".

An attacker could attack Bitcoin for "testing purposes" or to try to stay under the radar that they have cracked such of a strong encryption code.

[Peter R]

thanks for explaining.... i almost understand....  so, what is the m value actually?

I'm not a cryptography expert.  Most of what I've said in this discussion is just parroted from things I've previously heard said by individuals whose knowledge of cryptography I respect.  This topic has come up enough times, and I've read the responses enough times, that I can point out the things that others have pointed out in the past.  As such, there may be some holes in what I've said, but I'm pretty confident that I've got most of it right.

That being said, as far as I know the m value is the transaction that is being signed.  There should be a separate signature for each input in the transaction.  The transaction will include the public key, which means that once the input is signed the address where it was previously "received" is no longer protected by SHA-256 or RIPEMD-160.  Even if the public key wasn't included, it could be calculated from the signature.

Thanks Danny. :-). Me too, I really enjoy learning from others and passing on what I've learned.

Jonald, if you want to get right down to the guts of bitcoin transactions, this is an excellent article here.  Ken Shirriff manually assembles a raw bitcoin transaction and then signs it, and he explains what's going on right at the byte level.  

[jonald_fyookball]

thanks for explaining.... i almost understand....  so, what is the m value actually?

I'm not a cryptography expert.  Most of what I've said in this discussion is just parroted from things I've previously heard said by individuals whose knowledge of cryptography I respect.  This topic has come up enough times, and I've read the responses enough times, that I can point out the things that others have pointed out in the past.  As such, there may be some holes in what I've said, but I'm pretty confident that I've got most of it right.

That being said, as far as I know the m value is the transaction that is being signed.  There should be a separate signature for each input in the transaction.  The transaction will include the public key, which means that once the input is signed the address where it was previously "received" is no longer protected by SHA-256 or RIPEMD-160.  Even if the public key wasn't included, it could be calculated from the signature.

Thanks Danny. :-). Me too, I really enjoy learning from others and passing on what I've learned.

Jonald, if you want to get right down to the guts of bitcoin transactions, this is an excellent article here.  Ken Shirriff manually assembles a raw bitcoin transaction and then signs it, and he explains what's going on right at the byte level.  

Cool I'll check it out.  Thanks Peter for thinking of me.

Although to be honest I'm getting a bit bored with Bitcoin technicals lately.
My next intellectual pursuit is artificial intelligence.

[RepublicSpace]

basically it's impossible for BTC to get cracked

[odolvlobo]

basically it's impossible for BTC to get cracked

It is not impossible. Weaknesses may be found.

[Harley997]

basically it's impossible for BTC to get cracked

Nothing is impossible but it is highly improbable.

[pastet89]

Good question!!!!

I was thinking exactly the same months ago. Some of you involved in IT may know that the last "solid" cryptographic algo was MD5. However, years after its usages flaws were found in it. Then SHA crypto algos appeared and now they are solid. However, I am 99% sure after 20 years a flaw into them will be found as well. IT world is constantly developing race between hackers and security programmers.

[pastet89]

Think about the heartbleed bug as well. Something like this can always happen. While a currency relies 100% on IT security it is not safe - FACT.

[Beliathon]

You can never overestimate the stupidity of the masses.

Too true.

Genius has its limits, but stupidity is infinite.

IT world is constantly developing race between hackers and security programmers.

Hackers ARE security programmers. You're just not a fan of their programming. 

[Harley997]

You can never overestimate the stupidity of the masses.

Too true.

Genius has its limits, but stupidity is infinite.

If Bitcoin is going to be adopted by the masses then there will need to be more apps that are idiot proof

[Beliathon]

Nobody is going to be cracking SHA256 anytime soon. It's not even worth considering, honestly.

When Bitcoin is (...) adopted by the masses, there will (...) be more apps that are idiot proof

Fixed that for you.

[ajareselde]

Or what would happen if improved cryptography comes along, how would the protocol deal with this? Would a layer on top of the current protocol be enough to patch it up or will Bitcoin die?

Bitcoin is an open protocol, everything can be changed, patched , and so on.
Ultimatively, if sha256 gets to the point where its useless, bitcoin would have to switch algo, making all asics useless.

Would be a fun thing to see, also becose the price would have a major dip, where u could buy, knowing there will be just as powerfull rebound.

[Harley997]

Or what would happen if improved cryptography comes along, how would the protocol deal with this? Would a layer on top of the current protocol be enough to patch it up or will Bitcoin die?

Bitcoin is an open protocol, everything can be changed, patched , and so on.
Ultimatively, if sha256 gets to the point where its useless, bitcoin would have to switch algo, making all asics useless.

Would be a fun thing to see, also becose the price would have a major dip, where u could buy, knowing there will be just as powerfull rebound.

Open source means that individual users can make changes to what the do, but for the protocall to be chanced 1/2 of the miners would need to accept the change.

[bbit]

that is just it ...it never does get cracked! 

[jonald_fyookball]

Or what would happen if improved cryptography comes along, how would the protocol deal with this? Would a layer on top of the current protocol be enough to patch it up or will Bitcoin die?

Bitcoin is an open protocol, everything can be changed, patched , and so on.
Ultimatively, if sha256 gets to the point where its useless, bitcoin would have to switch algo, making all asics useless.

Would be a fun thing to see, also becose the price would have a major dip, where u could buy, knowing there will be just as powerfull rebound.

Open source means that individual users can make changes to what the do, but for the protocall to be chanced 1/2 of the miners would need to accept the change.

Not exactly.

It's not just up to the miners, it's up to merchants too. 100% of miners could go with a hard fork change that could be incompatible with what merchants call bitcoin.

Or, say, 20% of miners and merchants fork to a change and start using that ...would simply be another version of bitcoin but if incompatible, would cause a lot of confusion if both were called bitcoin.