Can Internet Outages Really Disrupt Crypto Networks?

In the wee hours of October 18, several parts of Europe, the Americas and Asia were left without internet due to several undersea internet cables being “cut”, causing a chain reaction of connectivity issues across the globe. France, Italy and Spain in particular were faced with significant blackouts, with many experts claiming vandals were to blame for the same.

According to Jay Chaudhary, CEO of Zscaler – an American cloud security company – there is no doubt that malicious third-party agents were to blame for the severed cables that resulted in packet data loss as well as latency for various websites and applications, adding that despite Despite their best efforts, authorities have been unable to determine who is responsible for the attacks.

Furthermore, it should be mentioned that over the last couple of days there have been a number of cut internet cables in and around the UK. On October 20, for example, a submarine submarine cable was cut near the coast of northern Scotland. While several reports have suggested foul play by rival government agencies – with the tense geopolitical situation in Europe amid the Russo-Ukrainian war – there is no hard evidence to substantiate these claims.

That said, it’s worth delving into the question of how events like these could potentially affect cryptocurrencies, especially from a network resilience and security perspective.

Internet cuts and their effects on digital assets

To understand how internet breaches like the one highlighted above could affect cryptocurrencies, Cointelegraph reached out to Nikolay Angelov, head of blockchain for cryptocurrency lending institution Nexo.

He began by saying that the regions affected by recent cable outages (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 the digital asset networks counteract the effects of such attacks since the flow of transactions flows to nodes with internet access and connectivity to the blockchain. Then he added:

“Not to undermine the seriousness of the incident, but such localized incidents cannot have a lasting effect on cryptocurrencies, as blockchain transactions can still be validated by other active nodes. In other words – almost every single Bitcoin node has to lose its internet connection for the Bitcoin blockchain shall seize Admittedly, it has been a tremendous inconvenience, but a temporary one.

On a somewhat similar note, Nukri Basharuli, founder and CEO of SuperProtocol – a trustless and permissionless cloud infrastructure – told Cointelegraph that while people need to understand that decentralization is not a silver bullet: if you pull the plug, you will feel the consequences. Web3, by its very design, is highly resistant to breakdowns resulting from cable cuts. He pointed out that applications hosted on a decentralized network along with their users won’t even notice if any of their nodes go offline.

“Such scenarios happen all the time where nodes are constantly turning off and on while the data stored remains intact and fully accessible. The network will automatically configure itself to provide the highest quality of service possible, he added.

Some concerns exist

According to Victor Ionescu, co-founder and CTO of decentralized exchange Hashflow, when analyzing events like these, the most important thing to worry about is the decentralization of the infrastructure versus the decentralization of the network’s stakeholders.

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Elaborating, he noted that as adoption scales up, many software companies will continue to use reusable infrastructures to run nodes, deliver blockchain data feeds and other related tasks. He added:

“These companies consolidating their infrastructures can spur a centralization of their networks. For example, if all Ethereum validators were to run in one AWS region, the region going down could bring down the network. This problem is less prominent in Bitcoin, but I expect mining hubs to become targets over time.”

Daniel Nagy, chief researcher and vice president of the Swarm Foundation — the organization behind the decentralized storage and communication system Swarm — told Cointelegraph that such events might only have a consequence for high-transaction-density blockchains like Solana. “Most networks below 100 TPS have enough redundancy not to be affected in any way by the loss of a cable in the Internet backbone infrastructure,” he noted.

That said, it’s worth highlighting that we currently live in a technologically advanced era, one where vulnerabilities associated with cable internet connections may soon become a thing of the past thanks to the advent of vandal-proofing innovations like Starlink.

Security Implications of Power Outages on Digital Assets

Herbert Sim, an advisor at Solidus AI Tec – an AI infrastructure provider – told Cointelegraph that the only way major power 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, which is extremely rare and difficult to obtain, adding:

“Major blockchains have millions of users worldwide. What this essentially means is that unless this type of outage is simultaneously affecting millions of computers in different parts of the world at once, it doesn’t have a chance to affect the security of digital assets. »

Similarly, Angelov believes that these outbreaks pose security risks to crypto networks, primarily in theory rather than in practice, since most blockchains are able to adjust their performance to reflect geographic power and/or internet outages by reducing mining problems when the number of active nodes decreases due to said outcome.

“This in turn could pose a risk to network security, as transaction verification is performed by fewer nodes or validators, but as mentioned above, very many nodes would need to be affected for this to happen, which is not currently the case. Transaction processing times are less likely to be affected , as in Bitcoin’s case, the blockchain is designed to reduce mining difficulty when the hash power is reduced to maintain an even number of transaction blocks,” he said.

Basharuli offers a technical view on the matter, arguing that when it comes to security, connectivity issues like the one mentioned above can potentially open up an angle of attack for malicious actors, one where they can mimic the behavior of the nodes that went offline and convince others that someone transactions are valid. “Again, making such an attack impossible is part of the design 101 rulebook for decentralized networks,” he added.

To counter such problems, Basharuli claims that developers could take advantage of the latest technologies available on the market (such as IntelSGX) designed to make confidential computing possible. He concluded by saying:

“Data confidentiality protects the data the moment it is processed, leaving no entry point for the malicious actor to somehow tamper with it, or even get a glimpse of what’s going on inside the system.”

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. A worrying factor is the fact that the main part of the infrastructure for several projects is in the cloud, and the cloud provider space is divided between two or three large players. Among these players, some locations are generally preferred by developers due to their proximity to the development hub.

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For example, US East Coast developers tend to prefer servers in Virginia. The use of cloud data centers therefore tends to be distributed in accordance with the locations of the development teams. Also, large-scale network partitions are not something developers have in mind when designing systems. “Network connectivity has been a luxury that we’ve taken for granted. In reality, we really need decentralized cloud infrastructure, but the technology isn’t there yet,” he said.

The future is decentralized, and rightly so

One of the more fascinating aspects of blockchain technology is that it corrects some of the main flaws of traditional computer networks, i.e. lack of decentralization. In this regard, Sim believes that as long as we continue to have the power of various networks concentrated in a few computers, power outages will always have an effect on them. “Because the blockchain is distributed across so many computers around the world, it’s immune to it. That’s why you rarely, if ever, hear about a blockchain collapsing,” he concluded.

Therefore, as we move into a future potentially affected by internet outages and other such issues, it stands to reason that more and more developers will continue to understand the true potential of blockchain technology and move in a decentralized direction.