bitcoins can use different algorithm, how and implications


I read that if sha-256 was compromised at some point in the future, or for any other reason, bitcoin could switch to a different algorithm

can someone detail how exactly that would work, and what the implications to existing blocks would be?

from my understanding, everything is hashed with sha-256, then another algorithm would be incompatible with all previous blocks....

can someone elaborate on this?

if bitcoin, or any cryptocurrency, switched algorithms, what would happen to people's current addresses and the ledger of transactions? In theory it should be very simple for major pools to switch to the new client, as has been done numerous times in cryptocurrency land, but I've never seen it done with a different algorithm.


Posted 2013-05-01T23:13:02.327

Reputation: 1 500

It's a fair question to ask since Bitcoin could in theory switch to use the SCrypt Litecoin algorithm. (hence there is no reason for Litecoin to exist) – halfbit – 2013-05-01T23:18:33.017

thank you @makerofthings7 , scrypt or even something else. – CQM – 2013-05-01T23:20:58.867



The only way to do this would be to announce a new version of the protocol well in advance. It would need to co-exist in the same blockchain with the existing keys and transactions and be adopted over time.

  • First, the client software with support for the new scheme needs to see widespread adoption before anyone can use the new algorithm
  • Once that has happened, early adopters (probably mining pools) can start creating keys in the new format and the blockchain will accept them.
  • If that worked well, the standard client will default to making new keys
  • Some more time down the road, everyone can agree that transactions can only be done to new keys, forcing the "old money" out of the system eventually

Bitcoin could in theory switch to use the SCrypt Litecoin algorithm. (hence there is no reason for Litecoin to exist)

I don't think that would be a good move. If people decided that the Litecoin algorithm is better, they can just use Litecoin. Bitcoin should stick with its algorithm, but make adjustments to parameters such as key length when those become necessary.

Choice of algorithm should be choice of blockchain (Bitcoin vs Litecoin) and can be left to the "market" to decide.


Posted 2013-05-01T23:13:02.327

Reputation: 4 601

2obviously bitcoin vs litecoin or sha-256 vs scrypt is a false dilemma, so I think that can be ignored. – CQM – 2013-05-02T00:55:22.593