Bitcoin Revisited: Formalization, Benchmarking, and Open Security Issues

Thousands of researchers and practitioners around the world neglect foundational understanding of the most trusted cryptocurrency platform, Bitcoin. According to the typical tendency of taking the discussion of Bitcoin's security for granted, it is usually confidently stated that, technically, Bitcoin is one of the most secure platforms for investment. In this paper, we revisit the fundamental calculations and assumptions of this widely adopted platform. We break down the original calculations in order to better understand the underlying assumptions of the Bitcoin proposal. Accordingly, we set open research questions, and we highlight expected scenarios upon the violation of each assumption. Furthermore, we propose a novel formalization of the Bitcoin mining problem using the Birthday Paradox, which we utilize to propose new concepts for benchmarking the security of Bitcoin, including the Critical Difficulty and Critical Difficulty per given portion. Our calculations indicated that it would be profitable to launch Partial Pre-Image attacks on Bitcoin once the mining puzzle difficulty reaches 56 leading zeros. Additionally, we discuss how Quantum Computing can be used to attack Bitcoin, and the implications of Sharding on the security of Bitcoin. The main objective of this work is to highlight, demystify, and justify the confusion between the realistic relative trust versus the common unconditional trust in Bitcoin.