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A few people I know compare bitcoin and gold regarding currencies with integrity; Martin Armstrong on Zero Hedge compared both in a recent post. One advantage I currently see that bitcoin has over gold is the cost to verify is much lower; it costs more to make sure that I've received legitimate gold than it does to verify that I've received a legitimate bitcoin. But this depends on the cryptography always being legitimate - what if in the future someone cracks it?

What would happen if someone in the future is able to crack bitcoin's cryptography? Does the system adapt at this point (and can it?)?

user541852587
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There are several layers to bitcoin's cryptography:

  1. ECDSA. Elliptical curves, specifically the problem of solving discrete logs is well-known to be a difficult problem. The particular curve that bitcoin uses is secp256k1. If that particular curve is cracked, there would probably be some sort of patch to change the curve in bitcoin, which if the other two things aren't cracked, should have a reasonable chance of success as people can migrate coins encrypted with the new curve. If Elliptical Curves in general are cracked, then the other two things securing bitcoins are still there. Also, many websites would be compromised right away, including banking sites and credit card verifications as they rely on this encryption as well.

  2. SHA256. If SHA256 were cracked, that is, if you were able to generate a source for any particular SHA256 hash, this would probably not mean much by itself. There are other algorithms that can replace this.

  3. RIPEMD160. Again, if this were cracked, it's useless without the ECDSA cracking. There are other algorithms that can replace this.

If any one of these things is cracked, there would most likely be a hard fork to move everything over to a different hash. It wouldn't be pretty, but it would be possible.

Jimmy Song
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  • This isn't really right. ECDSA (especially secp256k1) is not that popular, the majority of banking related cryptography is likely going to be the older RSA, beyond that we actually have no assurance that the problems are even actually hard to begin with. If SHA256 is compromised there's far more reaching impacts in Bitcoin, being able to make a second preimage for example would be devastating to Bitcoin (and not related to mining, it's used for TXID and merkle trees as well). – Claris Nov 08 '15 at 05:20