Read now to learn why the Bitcoin blockchain can continue to operate even if the internet is down locally or globally.
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One of my biggest passion projects within this Bitcoin newsletter is debunking FUD (Fear, Uncertainty, and Doubt), or misconceptions about Bitcoin that make their rounds in communities and the media. This is an educational newsletter about Bitcoin after all, so I debunk FUD quite frequently (see here, here, and here for recent examples).
A common misunderstanding about how Bitcoin works that I see rather often relates to Bitcoin and the internet. Almost all observable Bitcoin activity occurs over the internet, and this has led to the incorrect assumption on the part of many commentators that Bitcoin would not work if the internet went out, locally or globally. While the reasons why this misconception exists are at least understandable, it is still false.
There are two primary perspectives through which to understand Bitcoin operating without internet access: at the protocol level and at the user level.
Protocol Level
While Bitcoin is a revolution in money, decentralization, finance, etc., it’s important to keep in mind that it’s really just a ledger that publicly records the transfer of value between Bitcoin users. In other words, the Bitcoin ledger simply provides information about who owns what on the blockchain. So the reality is that consensus about transactions (i.e., information) on the blockchain could be established using any channel that allows Bitcoin users to all communicate with one another.
Don’t get me wrong. The internet is by far the most powerful communication channel the world has ever seen. Using any communication channel other than the internet would probably massively decrease Bitcoin’s speed and transaction capacity.
In short, my point isn’t that Bitcoin should move off the internet, nor that the blockchain would be better off without the internet. Instead, the takeaway here should be that assuming the Bitcoin blockchain has no possibility of operating without the internet is incorrect. In fact, future technological developments may lead to an even more powerful communication network than the internet. If that is ever the case, we should expect that Bitcoin will migrate to the new framework and leave the internet behind.
User Level
The reality these days is that most Bitcoin users don’t run their own nodes or their own miners. Instead they rely on other people to operate the blockchain infrastructure and process their transactions for them. In a very real sense then, individual users don’t actually need access to the internet themselves in order to access the Bitcoin blockchain. They just need some way to communicate their transactions, signatures, and other details to the miners and node operators who are connected to the rest of the blockchain.
This is already possible. As we reviewed in the previous section, the internet is far from the only way to communicate information from one place to another. In fact, Bitcoin transactions have already been successfully initiated using a number of other communication technologies:
Radio Waves
In early 2019, two Bitcoin users, one located in the U.S. and the other located in Canada, successfully transmitted Bitcoin over the Lightning Network using radio waves.
Satellite Transmission
The technology has been in place since mid-2017 to transmit transactions across the layer-1 Bitcoin blockchain via satellite and is used daily by people all over the world.
SMS Texting
SMS texting, which connects to a mobile network rather than to the internet, can be used by those without direct access to the internet or by those who are just looking for cheaper messaging options than internet-based texting. Sending Bitcoin via SMS is becoming extremely popular in places like Africa where mobile connections are far more widespread than internet access.
Accessing Bitcoin Without The Internet Matters
A key part of the Bitcoin ethos is the network’s openness and availability to any user at any time. But not everyone in the world has the ability to access the internet, and those who do still aren’t guaranteed to have that access 24/7. Technologies that don’t rely directly on the internet to connect to the rest of the Bitcoin blockchain are an essential step in improving Bitcoin adoption and in increasing the overall ability of the network to resist attacks against the mining and node infrastructure that supports it.
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This is not financial or business advice. This newsletter and related content are for informational purposes only. Cryptocurrencies and digital assets can be risky. Always do your own research before making any sort of investment.
