Why Bitcoin Didn't Fail In History's Biggest Tech Failure

Authored by: Teeka Tiwari

It may surprise you. However, after nearly a decade of covering cryptocurrencies, the most frequent question about Bitcoin has been about something other than its price.

The most frequent question is, what happens if the power grid fails?

The question is usually phrased like this:

"What happens to Bitcoin if a hostile actor uses an electromagnetic pulse (EMP) to take down the national grid?"

"Or what happens if a natural disaster knocks out the grid? Or if aliens attack? How can we access digital assets like Bitcoin?"

My "typical answer to this question would be, "If the" power grid goes down, you'll have bigger problems than worrying about accessing your Bitcoin."

That may sound dismissive. But if an EMP pulse or a solar flare knocked out the entire electrical grid, your biggest concern would not be Bitcoin.

Still, let's ask the question anyway since it's in the minds of so many folks.

Blockchain technology is an evolution of how the Internet is used. Remember that the In-ternet is built on centralized servers, while blockchains are built on decentralized servers.

Since there are many blockchains, let's focus on the one with the most value: the Bitcoin blockchain.

Using the Bitcoin blockchain, you can send almost anything of value as a tokenized asset to other people. That means everything from commercial property rights, home deeds, ve-hicle titles, financial securities, and collectibles.

It bears repeating that the main difference between the Internet and the Bitcoin blockchain is that the Internet is mainly centralized, while the Bitcoin blockchain is decentralized.

To access services on the traditional Internet, consumers must visit websites controlled by "gatekeepers" like" Google, Apple, or Facebook.

The Bitcoin blockchain doesn't have "permission” to be used. There are no gatekeepers, and no central authority can block access to the Bitcoin network.

The Bitcoin blockchain also doesn’t require “trust” to use. That means you don't have a third-party trust provider like a bank to approve or deny transactions.

Because current gatekeepers like Google and Facebook collect vast amounts of data, and the blockchain does not, the blockchain does a better job of protecting user privacy.

Of course, you need to connect to the Internet to use the Bitcoin blockchain.

Again, it's essential to ask what happens to the value of your digital assets when the Inter-net goes down.

Fortunately, last week, we got a real-world test case of what happens to Bitcoin when the Internet fails. Unsurprisingly, Bitcoin passed with flying colors.

The Biggest Tech Failure in History

Last Friday, the world experienced the most significant information technology (IT) failure in history.

It all started when a botched software update from cybersecurity firm CrowdStrike crashed countless Microsoft Windows computer systems globally.

And I'm not exaggerating when I say this was the world's worst IT failure.

According to news reports, airport hubs from New York to Berlin struggled with delays, cancellations, and stranded passengers. FlightAware said more than 21,000 flights were delayed worldwide.

The London Stock Exchange Group had to halt the bourse from publishing news on its website temporarily. Central banks like JPMorgan Chase, Bank of America, and Japanese investment house Nomura Holdings were forced to revert to backup systems.

The disruptions also impacted critical infrastructure, including emergency services.

Doctors in the United Kingdom could not perform scans, blood tests, or patient histories. Hospitals in Europe and the United States reported closing clinics and canceling proce-dures. The outage even affected 911 and emergency systems.

Shares of CrowdStrike dropped as much as 15% on Friday, wiping about $7.4 billion off its market value. U.S. stocks fell 1% due to worries about a global IT outage.

That may not seem like a lot. But 1% of the S&P 500 is roughly $450 billion.

With all the uncertainty and volatility caused by this global outage, Bitcoin would have failed miserably. After all, Bitcoin is considered exceptionally volatile and is wholly dependent on the Internet.

Yet, Bitcoin bounced nearly 5% on the news. Significant cryptos like Ethereum and Solana were up 3% and 7%, respectively.

So, what gives?

Why Bitcoin didn't crash when most of the internet failed last Friday, affecting thousands of companies and billions of people worldwide?

The Simple Reason Bitcoin Didn't When Everything Else Did

In today's world, everything is connected. Governments, militaries, airlines, banks, ATMs, colleges and universities, pharmacies and hospitals, media outlets, Hollywood, sports fran-chises…

They all connect to the Internet.

And the most popular operating system they use is Microsoft Windows. According to Statis-ta, nearly 70% of personal computers use Windows.

Just one piece of destructive code pushed through any level of the technology stack—a hardware upgrade by Lenovo or Dell… a security patch from McAfee or Norton…, or a sys-tem update from Microsoft or Linux—can halt the entire global economy.

It's let's house of cards that can collapse if just one tiny piece of code stops functioning.

Here is why Bitcoin is resilient to those failures: It isn't dependent on legacy systems.

Roughly 18,000 independent Bitcoin nodes around the world maintain the network.

Without getting into the details, bitcoin miners work around the clock to solve cryptographic puzzles. The first to solve this puzzle wins the right to process the next batch of transac-tions and earns a reward of 3.125 newly issued bitcoins.

Full node operators can verify transactions… but can't write transactions to the blockchain. Only a Bitcoin miner who solves the cryptographic puzzle for the most recent block of data can do that.

Full node operators keep the most current version of the Bitcoin ledger up to date and online.

The Bitcoin miners, who process transactions and keep the network secure, run the Bitcoin core software. This software is open source, meaning anyone can review the code behind it.

That means the community can review the code whenever the software is upgraded to en-sure it will function as intended.

Bitcoin and the software that it runs are entirely separate from anything the legacy systems operate on.

Friends, I need you to understand how critically important this is.

Bitcoin is NOT dependent on legacy technology systems to operate.

Sure, it runs on top of the Internet. So, if there is a massive global power outage instead of a massive global upgrade failure, as we saw with the CrowdStrike bug, you won't be able to access your Bitcoin while the power is down.

Here's the thing…

The world has not experienced a massive global power outage since the Carrington event of August 28, 1859, when a solar flare knocked out much of the world's solar system.

A massive global power outage is a low-probability event but has experienced enormous IT failures.

For instance, in 2017, a series of errors within Amazon's service affected tens of thousands of websites.

In 2021, issues at the content delivery network Fastly took out the websites of several me-dia networks, including Bloomberg.

These bugs can cause billions of dollars’ worth of damage to individual companies and even threaten entire industries, as we saw with the CrowdStrike failure.

Because the Internet is so connected, we'll see more small local failures causing wide-spread global failures.

That won't happen with the Bitcoin network.

If a bug is found in Microsoft code, some Bitcoin miners might forget to upgrade their soft-ware, or Google's servers might shut down…

The Bitcoin network won't stop working.

It's completely independent of the major technology companies on which our everyday lives depend.

That's why Bitcoin is resilient during times like the CrowdStrike bug. It's completely sepa-rate from systems built on top of decades-old technology.

You Can't Break Bitcoin

Bitcoin is a monetary technology unlike any the world has ever seen. It's impervious to gatekeepers, government intervention, and monetary dilution.

Short of a cataclysmic disruption in the world's infrastructure, no external "enemy" can "dis-rupt the Bitcoin blockchain to process blocks and prevent its users from accessing their funds.

Please think about what that is worth.

Bitcoin is a form of stateless money—money that no one state can control. Humans have never had that before, so Bitcoin is difficult for many people to understand fully.

Sure, you may think, but who needs stateless money while the current system works?

Friends, you can see that the current system is breaking down.

The average U.S. home is $450,000. That's because the government and the Federal Re-serve printed too much money.

They have diluted the buying power of our money so much that we're paying unheard-of sums for everyday basics like eggs, bread, rent, transportation, and even home insurance.

Just allocating 5% of your wealth to Bitcoin can protect your wealth and standard of living from the crushing effects of the massive monetary debasement I see on the horizon for the rest of this decade.

Bitcoin is THE liferaft amid the endless sea of money printing that all governments have become addicted to. Make Bitcoin a core component of your portfolio.

Let the Game Come to You!

This article was printed from TradingSig.com

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