Hacker News new | past | comments | ask | show | jobs | submit login

How does Bitcoin work offline? Let's say the world goes to hell (assume internet has been taken offline) and we need to trade using a form of trusted currency.

Just curious...




>How does Bitcoin work offline?

Depends on the stage of evolution of Bitcoin you're in.

Early Stage: two parties can still trade transactions offline but there's a risk of being double spent against (not completely trustless but not fully trusted).

Second early stage option is: A solution that attempts to prove that private keys to the bitcoin hasn't even been accessed before: https://opendime.com/

Late Stage: Assume Lightning Network connectivity. Since the payment channels in the LN prevent you from double spending coins (attempting to assign UTXO to a different party than your counter party), all you really need to do is issue a channel update and issue a preimage to a hash time locked contract HTLC


How much physical cash would you have access to if banking/financial networks were no longer accessible?


Shit, my bank is down a couple of hours each week for routine maintenance during which I can't even check my balance.


About as much as your IRA, money in your checking account, etc.

AKA, orders of magnitude less than a can of beans.


How does Dollar work offline? How much do you have in your pants? Because if the world goes offline, Banks would not have all the "money" necessary to give it back to people.


No different from the situation 500 years ago where a fire could destroy important records and leave countries in chaos. All banks need to do is keep track of how much money is in everyone's accounts and allow people to transfer money somehow. They do not need to be able to "give it back to people." Fiat money could exist on pen-and-paper ledgers too; in fact that was exactly what the earliest known money was (well, stylus-and-clay as neither pens nor paper had been invented yet).

If for some reason all our computers simultaneously failed without any warning, it would obviously be chaos, but at the end of the day the banks would be in a much better position to recover than anything like Bitcoin. Banks only use computer networks because they are more efficient than the alternatives; Bitcoin requires everyone to be online and does not have any alternatives. The worst thing that would happen if all computers failed simultaneously is that the banks would lose track of everyone's accounts -- a general amnesty for debtors and a big loss for people without debts -- and in the aftermath the banks would just start from scratch using older technologies.


I'm not sure banks would have an easier time recovering. Bitcoin's entire blockchain history, and therefore the balance of every wallet is replicated on thousands of hard disks in every country of the world. It's the ultimate backup strategy. We could make transactions by hand, based on this information, if we needed to.


I don't know but we've had centuries of dollars before online existed.


That is to say; not well. But considerably better than Bitcoin.


It doesn't work at all without the peer network. However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later. (I'm not 100% sure whether anti-replay features make this impractical.)


Offline signing is common, so theoretically you could print the transactions and private-key to the account/utxo on paper and use them as physical promissory/bearer notes.

Unfortunately though, it's the network that verifies the absence of double spends, so there's no guarantee of uniqueness.

With the no internet, and limited interbank settlement, I would still bet on the value of crypto over the fiat inflation that would be used to facilitate credit-worthiness.


Crypto would only retain its value in such a situation if a significant market system, in real goods, had been developed around it. Meaning you could exchange your crypto for the things you need. (Meaning the seller would have confidence they could do the same.)

It seems like this could work, hypothetically, but given the need we have for the currency of our country, it's hard for me to imagine that crypto would hold its value in the face of some kind of massive computer failure.


Ah, I hadn't thought of that. You still couldn't double-spend on the network, but you could double-spend the offline IOUs :)


> However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later.

And if you grant the holder of that IOU the sole right to print and distribute notes representing subdivisions of that debt, you’ll find yourself back at cash!


Each such IOU would be tied to a single specific bitcoin. That's not very much like cash, unless your definition is loose enough to call every stock, bond, and collectible in the world cash.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: