While it’s a robust protocol online, Bitcoin might not be so resilient (or, dare we say it, “antifragile”?) in the non-digital world.

What does that mean? It means that Bitcoin – like the internet itself – is dependent upon functioning global networks, reliable power supplies and standing cellphone towers. Switch off the routers and transformers, and knock down the towers, and Bitcoin has a problem.

Imagine, for example, trying to conduct local commerce with bitcoins in New Jersey after Superstorm Sandy. People did get creative when it came to finding ways to keep their smartphones charged in the days and weeks following the Oct. 29, 2012, storm, but it wasn’t always easy.

So the question of how to keep a future Bitcoin economy functional after a natural disaster isn’t a purely academic one: these situations do arise – and have arisen – causing a lot of inconvenience, and frustration along the way. In a system where plain old paper cash and coin are still an option, even people with no heat or lights at home and no gas in the car can usually hoof it to the nearest convenience store to shop with their flashlights on and buy a few cans of Spaghetti-O’s, crackers and Spam.

It’s something to consider as a large coastal population in the Northern Hemisphere currently prepares to usher in Hurricane Season 2013 (set to start Saturday (June 1), and expected to be a doozy).

A March 2013 survey of nearly 8,400 residents of New York, New Jersey and Connecticut found that three-quarters of them went without power for at least one day after Sandy … “with a median of seven days.” Almost as many – 73 percent – reported losing TV and internet service after the storm.

Repeat that in a world where most people depend upon working smartphones and network communications to buy and sell stuff, and it could prove really difficult to nab much-needed bottled water or toilet paper following a disaster.

There’s actually a name for the fear that technophiles face in such situations: nomophobia, the fear of being out of mobile phone contact. Whether that affliction is more a state of being inconvenienced than real-life pathology isn’t a question we’ll take on here. NJ.com writer Allan Hoffmann, however, concluded after Sandy that it’s basically a “first world problem” … and that a dose of “digital isolation” once in a while might be the cure.

It’s also interesting to note that one of the reasons so many Sandy victims temporarily lost their links to the digital world is that mobile phone companies serving the Northeast US had resisted the Federal Communications Commission’s efforts to encourage them to make better emergency preparations. Yes, ultimately, wireless access to the internet hinges upon a certain amount of regulatory oversight … even though those two words (“regulatory” and “oversight”) are anathema to some in the Bitcoin community.

What, then, to make of Verizon Communication’s fight against “net neutrality” on the basis of free speech? That is, the company argues that government cannot prevent an internet service company from choosing to provide faster network speeds and access to some customers over others. Could that ultimately mean some peers on the peer-to-peer network are more equal than others?

So maybe a hurricane could kick you out of the Bitcoin economy temporarily, or a network service provider could reset its preferences and slow down some types of e-commerce. Still manageable in the long run, right? But what about a bigger assault on the system … like one by Mother Nature?

Solar storms – giant flares or coronal mass ejections – have been known to mess with radio, satellite and electrical transmissions here on Earth. The big ones don’t happen often, and that’s something to be grateful for.

The most recent solar superstorm, sometimes called the Carrington Event, occurred in late August and early September of 1859 … long before Bitcoin, 4G, mobile computing or the internet. There were telegraph systems, though, and these failed across Europe, North America and even Australia. Some telegraph operators reported sparks flying from their equipment, sometimes setting off fires.

Today, with our homes, workplaces and shops more connected than ever in myriad ways, a similar event could “devastate” the modern world, warned the National Geographic.

“We live in a cyber cocoon enveloping the Earth,” said Daniel Baker, a researcher with the University of Colorado’s Laboratory for Atmospheric and Space Physics, said in the article. “Imagine what the consequences might be.”

Baker imagined just that in a National Research Council report on solar storm risks. Those risks, he said, include transformers across the power grid being destroyed by power surges … not just here and there, but possibly by the hundreds. Being neither cheap nor off-the-shelf, these transformers could take months and months to replace across large swaths of the globe.

“Imagine large cities without power for a week, a month, or a year,” Baker said. “The losses could be $1 (trillion) to $2 trillion, and the effects could be felt for years.”

The possibility of something like this might not keep most Bitcoiners awake at night, but it is something that’s occurred to some. In a Bitcoin Forum thread titled “Do Bitcoins need something REAL to back them?” the conversation veered from gold to the zombie apocalypse to, eventually, electricity:

“Gold/fiat do have one advantage over bitcoin …  you can still trade with them when the lights go out,” noted forum member AlphaWolf. “Don’t get me wrong, I think Bitcoin is superior in many ways … but imagine a world that trades exclusively in Bitcoin, and then imagine an EMP strike anywhere. We are close to this being an issue already with fiat being exchanged almost exclusively electronically, of course. I believe the smart course of action is ‘diversify’.”

He added, “Just as valid would be a major blackout, such as the Northeast Blackout of 2003 (and also 1965) in the US, or the 2012 India Blackout, or 2003 Italy Blackout… or any of the others on this list:
https://en.wikipedia.org/wiki/List_of_major_power_outages#Largest. With fiat, there exists the possibility that you could drive to another city with power, and extract some paper money from a bank. Bitcoin needs an easier way to transact physically, in person, even when the network if offline or inaccessible. Pretty big challenge … given that the strength of Bitcoin *is* the network.”

Image credit: Flickr

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