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Comment by temp191 | Hacker News Reader

what happens to your bitcoins if the algorythm gets cracked?

SHA256 or any of the other algorithms can be replaced at any time if the community feels that they have become insecure.

The algorithm is already "cracked", bitcoin has been open source from the very beginning.

What? We're talking about cracking the cryptography: suppose someone had e.g. a preimage attack on the algorithm used to hash the blockchain. (I suspect the answer is: all your bitcoins become worthless. But all the dollars in your bank account are gone too, because your internet banking is secured using the same algorithms).

If someone announced a flaw in sha2, but didn't release details, the banks could migrate their security away from it. But the bottom would completely fall out of the bitcoin market because nobody wants to be holding when the other shoe lands.

Maybe bitcoin could be upgraded to sha3, but it would probably require action on the part of every owner. Anyone who fails to upgrade in time would find their bitcoins have evaporated. Makes it hard to react in a short time frame, whereas a bank could, in the worst case, pull the plug and ban online transactions until they've upgraded.

Can't say for sure but I think the bitcoin community would come to a majority consensus on the last block in the blockchain before the attacks started, and at which point the new crypto algorithm must be used.

I think you're right. I was assuming you'd need to conduct a transaction with the new hash to "prove" ownership, but that doesn't seem necessary. If the flaw involved faking private keys, that'd be different.

I'm not sure they would force new transactions to use the new hashing algorithm. Bitcoin uses scripts (a little state machine) to embed verification behaviors directly into the blockchain. You could only introduce the new hashing algorithm to the protocol, and by natural incentive to upgrade (more security), expect more transaction outputs to use it. I'm not sure the Bitcoin developers would force clients to ignore certain hashing algorithms -- scripts can be very dynamic and the smaller the hashes are, the cheaper they are to add to the blockchain.

A very good point. Nobody likes talking about how owning >50% of the nodes let's you decide the fate of the network...

It's 50% of the network compute power (not nodes) which currently stands at 147.99/2 petaflops or more than the top 500 supercomputers combined http://bitcoinwatch.com/ http://www.top500.org/lists/2011/06/performance_development

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