Bitcoin miners have a lot on their plates, running complex computer programs to authenticate a set of blocks before adding them to the blockchain. It is easy to see how much Bitcoin depends on our power grids to remain operational. But electricity may sometimes fail, and what happens to Bitcoin if the power grid is down?
Bitcoin will probably suffer a bit if the power grid goes down temporarily, but it will survive. Bitcoin operates on several blockchain servers joined together. Data is stored in several network devices in different locations, and the failure of one device due to power doesn’t impact the entire blockchain.
Bitcoin mining’s proof of work mechanism uses computer resources that consume enormous amounts of electricity, so it’s only natural to worry about power outages. Learn more about what happens to Bitcoin when the power grid is down.
What Happens to Bitcoin in a Power Outage?
In the case of a power outage, Bitcoin will survive as long as a single blockchain server is still running and accessible. Other energy sources can be used to temporarily operate Bitcoin networks and servers, enabling it to survive even if the whole world experiences a power failure.
Bitcoin is a digital currency stored electronically in a Blockchain database that requires electrical energy to operate. Because a blockchain is a computer network, either on a primary computer network or in the cloud, it requires electricity to function.
Other electricity alternatives can be used to certain extents when the power grid is down to run blockchains. Please see our article “What Happens if the American Power Grid Goes Down?”
Take gas-operated generators, thermal energy, wind power, and solar, for instance. If properly structured, alternative types of electricity production can be used temporarily, if necessary, instead of traditional energy sources. These resources could be used to operate Bitcoin’s different servers and networks, allowing Bitcoin to remain functional.
Bitcoin Doesn’t Only Depend On Power To Survive
Bitcoin survival is not only based on electricity to survive. There must also be global networks for communications and the Internet. Blockchain is the underlying technology that enables Bitcoin to exist.
A Blockchain is a shared database that stores information electronically in digital format. Blockchains are digital ledger systems that can keep a data record of any kind. Blockchains track and store data and were designed to be decentralized and stored on multiple computers.
A digital database is an organized collection of structured information, or digital data, typically stored electronically in a computer system.
A person’s Bitcoins Key can be kept inside a Crypto Wallet or a dedicated hardware device. Bitcoin can also be held on a thumb drive for personal temporary cold storage but is not preferred or safe. You need access to a network or the internet to access the blockchain.
What Happens if Everything Goes Down?
If you think certain things in your life cannot be shut down, then think again. In today’s world, global superpowers use Computer System Hacking as a weapon, and anything is possible. The Chinese government has regularly shut down access to entire communications systems, including the internet gateways in areas in response to specific events.
Now, suppose that everything is down due to hacking, war, or a solar flare. The internet, global networks, the world’s power grid, and cell phone towers are out of commission. Bitcoin aside for a moment, the world will be in chaos with many things needing solutions to start running again. Bitcoin would probably not be viable in this scenario, but it wouldn’t be the first priority either.
Bitcoin is a somewhat new concept to the general population today. There have been significant investments in the past few years, making the concern for storage and usage of this currency a valid concern.
Worst-case scenarios like all of the global systems described above going down simultaneously is not only unlikely but would be unprecedented.
What Happens to Bitcoin if the Internet Goes Down?
Bitcoin will lose a significant portion of its functionality if the Internet goes down for a considerable time. Bitcoin transactions depend on a network to be processed and verified. Bitcoins stored in online wallets would become inaccessible, and the currency’s value would decrease.
Three things will happen to Bitcoin if the Internet goes down. First, users won’t be able to conduct transactions. Second, the blockchain will stop synchronizing data, leading to transaction inconsistencies once the Internet resumes. Worst of all, the perception of Bitcoin may weaken.
Since Bitcoin, also known as BTC when traded, is a digital currency, it requires the Internet to allow people to exchange, buy, and sell Bitcoin. If the Internet goes down for several hours, one can only imagine how much Bitcoin users would lose. Imagine how it would be for an entire day!
There Won’t Be Bitcoin Transactions
No Internet means a break in the Bitcoin network. Through the blockchain network, transactions on all the ledgers get distributed to the many computers in the same network. These computers communicate, passing information from one to the other, which wouldn’t be able to happen until the Internet resumes.
Bitcoin is mostly entirely dependent on the Internet for its transactions to occur. But on the brighter side, the ledger’s information doesn’t get distorted by the lack of Internet. Therefore, once the Internet connects back, the distribution chronicled across the computers can also resume.
The computers will then use their copies to verify the information contained in the moving ledgers to guarantee consistency. Blockchain synchronization also stops when the Internet goes down, which means there will be a break in processing transactions.
This break can sometimes lead to inconsistencies in the transactions, leaving Bitcoin users with only two options. They can decide to either leave the networks or physically update their blockchain.
Bitcoin Perception Could Weaken
If the Internet went down for an extended period, Bitcoin holders would probably lose faith in the currency. There’s always transparency in Bitcoin operation because the blockchain is accessible to every user. However, users can neither conduct transactions nor view them with the Internet down.
This perception would worsen if this unfortunate event lasted for several days or weeks. Many people will opt out due to a lack of faith, affecting the BTC value. If you not only don’t have access to your money but utilizing regular transactions to spend it makes it worthless.
There are always glitches in new technologies to figure out, adjust, and overcome. There is also talk of figuring out ways to run Bitcoin and cryptocurrencies without the internet. Already there is the bitcoin Blockstream from space, which doesn’t require the Internet.
Please see our interesting article on “What Is Laser Communications?”
Can Bitcoin Be Shut Down?
Bitcoin can’t be shut down because it’s decentralized. The only way to shut it down would be to break its cryptographic algorithm. Some jurisdictions have tried to shut Bitcoin down but have failed. Governments can only restrict or ban its use in their respective countries.
Although Bitcoin can’t be shut down, three possible scenarios could impair its operations, bringing it to a temporary halt.
- A global power outage. A global power outage that goes on for several days would shut down the Internet and all the communication channels. With this, the servers in the Bitcoin network would not be able to communicate with each other. This situation would cause the Bitcoin system to fail. Still, the operation would most probably resume once the power comes back.
- Software bug. In this scenario, the Bitcoin system becomes infected with a critical software bug that remains undetected even after intensive testing. Such a bug would cause problems in the Bitcoin network, impairing its operations.
- Blockchain Hacking. The blockchain has been hacked and will continue to be the longer it is in service. No system is impenetrable if given the time and effort.
Bitcoin could end if someone can break its hash algorithm, SHA-256 (Secure Hash Algorithm 256-bit). This algorithm is very secure, so this is an improbable occurrence. Breaking would allow one to mine all the available blocks in the blockchain before anyone else.
What Is Bitcoin?
Bitcoin is a decentralized virtual currency that people exchange directly among themselves, without banks as intermediaries or government control. It’s the most popular cryptocurrency among the over ten thousand cryptos available today.
Bitcoin was intended to provide an alternative way of payment that was free of central control. People would send money through the Internet and just like with traditional currencies. However, BTC use has evolved. It has become an asset that traders and investors can trade or hold.
Despite its popularity, some countries still don’t recognize this digital currency. Some countries even deem Bitcoin illegal. Bitcoin mining has also become a problem for some countries due to the energy requirements and electricity shortages.
Big corporations have also monopolized Bitcoin and cryptocurrencies mining, taking away what Satoshi Nakamoto has proposed. Nakamoto envisioned equal access for all, and dominating one aspect of cryptocurrency takes that away.
How Bitcoin Works
BTC transactions involve buying, selling, and exchanging. People buy Bitcoins with real money or exchange assets like land and homes for Bitcoins. All transactions from the exchange get recorded on a network called the blockchain. Blocks contain information about every transaction conducted, with entries recorded chronologically.
This information could include exchange date and time, emails, and more specific information, like marriage certificates and land titles. Bitcoin holders can access and view any block they wish in a blockchain. The information in these blocks is usually made public.
Such transparency makes it possible for Bitcoin holders to trace the history of their coins, which makes it difficult to commit Bitcoin fraud. A scammer can’t make Bitcoin duplicates or spend Bitcoins they don’t own. Users store their Bitcoins on a digital wallet, which can be online or offline. When people send Bitcoins, the coins end up in the receiver’s wallet.
Bitcoin operates on many servers joined together through a single network. For this reason, a power grid going down can’t stop its operations as long as there’s one server running and accessible through the network.
It is likely that eventually Bitcoin and different forms of cryptocurrency may well not need the internet or traditional power sources to operate and who knows what the future holds.