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In the wee hours of Oct. 18, several parts of Europe, America and Asia were left without any internet due to several undersea internet cables being \u201ccut,\u201d causing a chain reaction of connectivity problems across the globe. France, Italy and Spain, in particular, were faced with significant outages, with many experts claiming that vandals were to be blamed for the same.<\/p>\n
According<\/a> to Jay Chaudhary, CEO of Zscaler \u2014 an American cloud security company \u2014 there is no doubt that nefarious third-party agents were to be blamed for the cut cables that resulted in packet data losses as well as latency for various websites and applications, adding that despite their best efforts authorities have been unable to pin down the individuals responsible for the attacks. <\/p>\n Furthermore, it bears mentioning that over the last couple of days, there has been a slew of cut internet cables in and around the United Kingdom. For example, on Oct. 20, an underwater submarine cable was slashed near the coast of northern Scotland. While several reports have suggested foul play from rival government agencies \u2014 with the tense geopolitical situation in Europe amid the Russian-Ukrainian war \u2014 there is no hard evidence to substantiate these claims. <\/p>\n That being said, it is worth delving into the question of how events like these can potentially affect cryptocurrencies, especially from a network resiliency and security perspective.<\/p>\n To understand how internet outages, such as the one highlighted above, can affect cryptocurrencies, Cointelegraph reached out to Nikolay Angelov, head of blockchain for cryptocurrency lending institution Nexo.\u00a0<\/p>\n He started off by saying that the regions affected by recent cable disruptions (primarily France) account for just over 3% of Bitcoin nodes globally and just under 3% of Ethereum validators, adding that the decentralized nature of these two largest digital asset networks counters the effects of such attacks since the flow of transactions streams to nodes with internet access and connection to the blockchain. He then added:<\/p>\n \u201cNot to undermine the seriousness of the incident, but such localized events cannot have a lasting effect on cryptocurrencies, as blockchain transactions can still be validated by other active nodes. In other words \u2014 almost every single Bitcoin node has to lose internet connection for the Bitcoin blockchain to seize. Admittedly, it\u2019s been a massive inconvenience, but a temporary one at that.\u201d<\/p><\/blockquote>\n On a somewhat similar note, Nukri Basharuli, founder and CEO of SuperProtocol \u2014 a trustless and permissionless cloud infrastructure \u2014 told Cointelegraph that while people need to understand that decentralization is not a silver bullet: If you pull the plug, you\u2019ll feel the consequences. Web3, by its very design, is highly resistant to breakdowns emanating from cable cuts. He pointed out that applications hosted on a decentralized network along with their users won\u2019t even notice if some of their nodes go offline.<\/p>\n \u201cSuch scenarios happen all the time where nodes constantly switch on and off while the data stored remains intact and fully accessible. The network will automatically reconfigure itself in order to provide the highest quality service possible,\u201d he added.<\/p>\n According to Victor Ionescu, co-founder and chief technical officer at decentralized exchange Hashflow, when analyzing incidents like these, the main thing to worry about is the decentralization of the infrastructure versus the decentralization of the network\u2019s stakeholders.\u00a0<\/p>\n Recent:\u00a0Happy Halloween: The five spookiest stories in crypto in 2022<\/a><\/em><\/strong><\/p>\n To elaborate, he noted that as adoption scales up, many software companies will continue to utilize reusable infrastructures for running nodes, providing blockchain data feeds and other related tasks. He added:<\/p>\n \u201cThese companies consolidating their infrastructures could spur a centralization of their networks. For example, if all Ethereum validators were to run in one AWS region, the region going down could take down the network. This problem is less prominent in Bitcoin, but I expect mining hubs to become targets over time.\u201d<\/p><\/blockquote>\n Daniel Nagy, chief scientist and vice president for Swarm Foundation \u2014 the organization behind the Swarm decentralized storage and communication system \u2014 told Cointelegraph that such events might only be consequential for high transaction-density blockchains such as Solana. \u201cThe majority of networks below 100 TPS have enough redundancy not to be affected in any way by the loss of one cable in the internet backbone infrastructure,\u201d he noted.<\/p>\n That said, it is worth highlighting that we currently live in a technologically advanced era, one where vulnerabilities associated with cable internet connections could soon become a thing of the past thanks to the advent of innovations like Starlink, which stand to counter acts of vandalism.<\/p>\n Herbert Sim, an adviser at Solidus AI Tec \u2014 an AI infrastructure provider \u2014 told Cointelegraph that the only way major outages can have an effect on a digital asset is if a large mass of computers that make up the network are affected at the same time, something that is extremely rare and hard to pull off, adding:<\/p>\n \u201cMajor blockchains have millions of users around the world. What this means, in essence, is that unless this sort of outage simultaneously affects millions of computers in different parts of the world at once, it does not have a chance of affecting the safety of digital assets.\u201d<\/p><\/blockquote>\n Similarly, Angelov believes that these outages present safety risks to crypto networks, primarily in theory rather than in practice, since most blockchains are capable of adjusting their performance to reflect geographical power and\/or internet outages by lowering their mining difficulty when the number of active nodes decreases because of said outages.\u00a0<\/p>\n \u201cThis, in turn, can pose risks to network security, as transaction verification is executed by less nodes or validators, but as mentioned above, a great many nodes must be affected for this to happen, which is not the case currently. Transaction processing times are less likely to be impacted as in Bitcoin\u2019sinstance, its blockchain is designed to decrease mining difficulty when the hash power lowers to maintain a steady number of transaction blocks,\u201d he said.<\/p>\n Providing a technical take on the matter, Basharuli claims that when it comes to security, connectivity issues such as the one mentioned above could potentially open an attack angle for malicious actors, one where they could imitate the behavior of the nodes that went off the grid and convince others that some transactions are valid. \u201cThen again, making such an attack impossible is part of the design 101 rulebook for decentralized networks,\u201d he added. <\/p>\n To counter such issues, Basharuli claims that developers could leverage the latest technologies available in the market (such as IntelSGX) designed to make confidential computing possible. He closed out by saying:<\/p>\n \u201cConfidential computing protects the data in the very moment it’s being processed, which leaves no entry point for the malicious actor to somehow temper with it, or even get a glimpse of what’s going on inside the system.\u201d<\/p><\/blockquote>\n Ionescu believes that as a result of these outages, being able to attack a statistically significant number of validators could pose problems for specific networks. One concerning factor is the fact that a majority of infrastructure for several projects lies in the cloud, and the cloud provider space is split among two or three major players. Among these players, some locations are generally preferred by developers due to their proximity to the development hub.\u00a0<\/p>\nInternet cuts and their effects on digital assets<\/h2>\n
Some concerns do exist<\/h2>\n
Safety implications of outages on digital assets<\/h2>\n