Recently I have been researching and thinking of a way for Bitcoin (BTC) to be connected as a physical deterrent to hacking. BTC already uses proof-of-work (PoW) which connects its servers to the electric grid. If a mechanism can be created to route traffic through BTC it would substantially reduce malicious attacks. This is due to the increase in resource costs that would be required through the BTC network if a malicious attack occurred.
Imagine a hacker attacking a large corporation and for them to execute their attack it costs $100 million dollars. If there is no profit, no one will pursue it. Even if China hacked the United States government servers, would it pay $4 trillion dollars to do so? This example highlights the potential for this concept to deter even state-sponsored attacks. Even if a nation-state has vast resources, the economic cost of a large-scale attack could become a significant deterrent.
This hinges on three points. PoW’s resource intensity: Bitcoin’s proof-of-work requires significant computational power and energy expenditure to validate transactions and secure the network. That inherent costliness is the foundation of its security. Traffic routing through PoW: the key innovation is to find a way to route network traffic — or critical portions of it — through a system that necessitates PoW calculations. Economic deterrence: by making attacks prohibitively expensive, you create a powerful economic deterrent. If the cost of an attack outweighs any potential gain, it becomes less attractive.
The open questions are mechanism design, scalability, cost, and energy. How would traffic routing be implemented — a separate blockchain, a layer-2, or modifications to Bitcoin itself? BTC’s current transaction throughput is limited. Would added PoW introduce unacceptable latency? Who bears the cost — users, organizations, or governments? And could other proof-of-work algorithms, or even proof-of-stake, produce a similar deterrent with less energy?
The idea of using Bitcoin’s proof-of-work as a cyber defense mechanism is a thought-provoking concept with the potential to revolutionize cybersecurity. While there are significant challenges to overcome, further research in this area could lead to innovative solutions for protecting critical infrastructure and data.
Pierce Novak