What Happens to ADA When Electricity is Gone?


#1

This is one of the criticisms that crypto skeptics have: If an Electro-Magnetic Pulse (EMP) or nuclear war destroyed our electrical grid, all these cryptocurrencies would be instantly worthless because there would be no way to access them.

The Doomsday Scenario. Given that the Domesday Clock is as close to the Midnight Apocalypse as it has been since 1953 (when the U.S. and the USSR began testing hydrogen bombs), this is actually a non-trivial concern. An EMP attack is relatively easy for a nuclear state to execute (including at least 9 countries today, with more coming); and it’s even within the capabilities of well-funded terrorist groups like ISIS and Al-Qaeda. It only requires a relatively low-yield warhead (~10 kilotons) launched from a barge in relatively unguarded international waters (12 nautical miles off any coastline) to effectively destroy the entire U.S. electrical grid.

Cardano Without an Electrical Grid? Theoretically, it would be possible to use solar-powered electricity generators to power some Cardano full nodes to keep the blockchain running at some degraded level of performance, mobile devices running Daedalus for lightweight nodes, and USB-based hardware wallets to preserve some minimum accessibility to our ADA and the blockchain. However, this scenario would only be possible for a tiny number of people who have the foresight to obtain a solar powered electricity generator, which means only a minuscule fraction of any large population would have access to their ADA. Thus, this is not a realistic option to preserve the continuity of any large-scale crypto-based monetary system during a catastrophic electrical grid failure.

What About Paper-Based Wallets? Even though paper doesn’t depend on electricity directly, the scarcity of paper would rise rapidly without electricity to power the paper supply chain. And paper wallets still depend on electricity to verify transactions; thus, paper wallets would not be a realistic option, either.

Many Cascading Systemic Failures. The consequences of an EMP attack or other type of long-term grid outage are catastrophic on many levels (nuclear power plants melt down, food and water supply chains break down, chaos and anarchy proliferates, etc.); so, a collapsed crypto (and fiat) monetary system will be only one of many cascading systemic failures. (The ultimate “cascading disruption.”)

Is There Any Way to Mitigate These Risks? Aside from the obvious “get your guns, gold coins, and 1 million calories of MREs and hunker down!!!” how can we mitigate these risks? Is it even possible to have a cryptocurrency without a functional electrical grid? If so, what level of minimum system performance would enable a blockchain to continue operating within the context of a degraded electrical grid? Is there a way to realistically represent ADA as physical tokens in the physical world to preserve the continuity of Cardano when grid-based electricity is gone?

I assume a “Nuclear Holocaust-Proof Blockchain” feature is already on the Cardano roadmap (jk), but until that feature is turned on, I still have to explain Cardano to many smart people in my network who will ask challenging questions like these. So, I’m looking forward to your comments and ideas.


Creating a USB type device that can send and receive ADA
#2

I have multiple points to counter and/or mitigate this kind of skepticism:
1 - The odds that multiple EMPs could literally destroy every single electrical grid on planet Earth are very low. Big chunks, sure, but if we assume highest risk of EMP is North Korea vs US - no way they are going to waste missiles on South America (and vice versa) and many other non-relevant countries. Missiles would be targeted on adversaries, not the entire planet.
Therefore, in almost any scenario, some portion of Cardano remains alive and active if we achieve good global penetration.

2 - Cold storage - from the roadmap:

Therefore if many people use this, then at least some Ada is preserved in the event of the almost impossible scenario of no electricity on the planet.

3 - (Future) - some coin was claiming they would have a node running on a satellite in outerspace to further protect the blockchain (don’t recall which one now). Unclear if an EMP (or EMPs) would affect it (based on height of explosion vs orbit and relative distance), but if Ada eventually had a satellite based checkpoint it could be argued this further protects the blockchain.

Anyway my main point is that the ability for EMP to wipe the entire grid of the planet is very, very remote. Advesaries would target each other, not every square inch of the planet for obvious reasons. Even in a nuclear winter scenario, the blockchain could be offlined as that would take many months for things to slowly devolve, and saved for eventual restoration of electricity and restoration of the blockchain from storage.


#3

The odds that multiple EMPs could literally destroy every single electrical grid on planet Earth are very low. . . .

Excellent point! So, with sufficient multi-continent blockchain penetration, we can reasonably assume that the Cardano blockchain itself should never be totally unavailable. The service quality would be degraded, but at least wallets with solar power-based electricity could access it, assuming there was some kind of Internet connection available, which is a big assumption in a grid-down scenario.

All network infrastructure powered by the grid would be down. So, only a direct link to a cellular station with some non-grid source of electricity (solar, wind, geothermal, or water turbine) would enable user wallets to communicate with the blockchain hosted in the unaffected region, which would be necessary for transaction settlement. It’s still a very difficult scenario, but at least it’s technically possible without an electrical grid.

A paper wallet is a new type of wallet that will be available in Daedalus. . . .

I don’t see how that implementation (as described) resolves the challenges with paper wallets that I described previously (i.e., paper scarcity and dependence on electricity to verify the transactions). However, I suppose the paper wallet generator feature of Daedalus could be updated to enable users to divide a user’s total ADA into multiple chunks (like $5/10/20/100-bills and fractional pennies, quarters, dimes and nickels today), which would enable a degraded form of offline currency as a medium of exchange.

Providing that feature in Daedalus is not that difficult, but users would still need a printer or some way to see their divided ADA codes on an electrified screen to write them down manually on strips of paper. And unless they printed out hundreds of strips of paper-based ADA tokens before the grid outage, they would still need access to an electrified screen connected to their offline wallet to be able to create their paper-based ADA. And verifying the authenticity of each ADA token code would be a nightmare, but still technically possible assuming the cellular connection described above.

So, under the conditions and assumptions above, I suppose it would at least be theoretically and technically possible for a society to continue functioning with an ADA-based monetary system even if their electrical grid collapsed.

Is Cardano Potentially More Resilient to Electrical Grid Collapse than the Fiat Banking System? If so, then this is a powerful revelation and we can now make a credible case to crypto-skeptics: The systems/processes described in this thread would be significantly more resilient to grid collapse than the fiat-based banking system that we have today. This is because there’s no plausible fallback measures available at all when you live in a society that is completely dependent upon a cashless banking system with no ability to convert your account balance into paper-based tokens that can be cryptographically verified with a blockchain running in an unaffected geographical region.

Fun thought exercise!


#4

This is a really good point that might be good marketing actually. Many crypto-skeptics think only fiat is ‘real’ but in the event of a tumultuous calamity, ‘real’ money is far more likely to go worthless than Ada.
Charles kind of referenced this in his interview - talking about how many times after a civil war (say like Syria) the govt property ledger gets destroyed and people lose their long owned property. But on Cardano or blockchain type of tech, a civil war would still leave all the property ledger neatly available after the war due to its very decentralized nature!


#5

It’s impractical to trade cryptocurrency offline, because you don’t know if someone is double spending. Unless you are isolated in a small valley with a local lord running a paper node.

Even then, you’re better off just writing signed IOUs.


#6

But think about this… if the grid goes down, what are you going to buy? There’s no Amazon or Steam sales. Or Starbucks. By the time most goods and services come back online, your cryptocurrency will be back online too.


#7

Agreed, conditions would be tough, but the main takeaway from the thought exercise so far is this:

It’s at least technically possible to run an ADA-based economy without grid-based electricity, but it’s technically impossible to run an economy based on the current fiat banking system without grid-based electricity.

It’s impractical to trade cryptocurrency offline, because you don’t know if someone is double spending.

Having a delayed transaction confirmation process is not the same as not having any transaction confirmation process at all. Especially for relatively higher value transactions, it would be desirable and possible to transact with the following sequence:

(1) Tell the merchant what you want to buy.
(2) Give the merchant a unique paper token generated as described previously.
(3) Give the merchant time (hours/days/…) to walk/pedal to the nearest available solar-powered cell tower with network connectivity, which would enable him to connect to the blockchain being served from another region/continent.
(4) Resume the transaction after the merchant has deposited the token in his ADA wallet.
(5) Customer takes possession of the product.

The merchant has an incentive to not cheat the customer because the merchant wants to attract more future customers and doesn’t want a bad reputation. And the customer can’t cheat the merchant because the merchant verifies the value of the token before releasing the product.

The paper tokens are just like paper wallets today: They have value, which can be exchanged for physical products in any brick-and-mortar store. All primitive economies operate with physical tokens, but in this case, we would have a valuable, counterfeit-proof paper token that would enable us to confidently engage in a substantial amount of high-value commerce without having to dig up the gold and mint our own coins.

I know it’s not ideal, but it’s at least technically possible; and sometimes that’s all you need when widespread cataclysms strike.


#8

I have an idea… What if we fund the design of a Ledger Nano type device that is capable of transfering ADA from device to device by plugging them together? We would obviously have to make it solar powered too.


#9

@ADAGuy This is a really great and plausible idea because hardware devices with trusted chips that are provably secure make this possible already. All we need to do is add NFC and/or Bluetooth functionality and a tiny solar cell to power a Ledger Nano and it would definitely work.

This actually is the BEST and most elegant solution of all. Bravo ADAGuy–we are saved!


#10

Just some related thoughts. I believe in the truth of the bible (not wanting to that debate here). I find it interesting that there are passages that seem to point to worldwide adoption of block chain technology (and that electricity will be available) during the period known as the great tribulation (Apocalypse).

The bible points to a future where governments are united (or some believe a one world government) that directly controls commerce with (what seems like) embedded trusted hardware, linked to some kind of immutable identity system and to each individuals financial resources. I believe the block chain technology will bring this to pass eventually. Hopefully not for many years.


#11

I am hoping in my idealism space , to help put together a satellite / space station node for asgardia when the time is right . They arguably have a LOT to gain from cardano.


#12

Oh yeah! I heard Asgardia wanted to create its own crypto coin, but imagine if it (it= referring to the “country”/“governance”) rather adopted ADA - oh boy!!!


#13

I’ve actually been thinking about this for a while now. My initial thought was how to make crypto spend like cash. If you treat the device like a cold storage, although it would be more of a warm storage, it would make your main wallet more like you bank account and the device would be your cash wallet. I don’t have the technical skills to make it work, but I’m certain many of you do. I do have design ideas. For instance, make one side of the device the output/send and the other side the input/receive. It could be as simple as usb ports.


#14

I do not think you can do this, just think of it a bit. ADA is not in any HW Wallet (I would say crypto wallets are not
wallets but key chains) but on the Network. Same applies to the paper wallet. If ADA network goes completelly down, then your paper wallet is useless as it just guarantees to access to your ADAs which are on the ADA Network (Mainnet) and you cannot guarantee that the real ADA network comes back (remember the malicious participants for the consensus perspective).


#15

I believe I saw in one of Charles’ many interviews he made reference to being able to load up a debit card with ADA to be able to spend it off chain. It was in reference to speeding up block chain transactions by removing some transactions from the chain completely but it would obviously work in the doomsday scenario above as well.


#16

If that happened why would you need any money? Fiat or crypto. You would be trading in food, weapons and ammo. Just saying…


#17

@rankun Generally I agree that would be true in some areas, but usually every civilization begins to evolve a monetary system because barter and trade does not facilitate capital accumulation and deployment, which are necessary to elevate a society above primitive/crisis conditions.

And they aren’t mutually exclusive. Some categories of small-ticket goods work easily with barter and trade while larger-ticket items are harder to price without more sophisticated forms of accounting and a fungible currency. It’s the second category that I was primarily thinking about in our doomsday scenario.


#18

@_ilap Our doomsday scenario includes an important assumption: The grid would not be down globally, which means the Cardano blockchain would still be accessible globally wherever a network connection could be established. Of course the performance would be degraded in a grid-down scenario, but for some categories of goods and services (particularly large-ticket items) the network delays would be acceptable as a trade-off for being able to execute high-assurance, large-ticket transactions


#19

You cannot prevent double-spends if you are temporary off the Net (as you need confirmation from the Network itself), which was suggested by having some solar powered HW device for NFC/BT and connect them together. Nothing prevents me to have multiple HW wallets w/ the same private key and I can use each of them cooperating w/ different merchants assuming I and they are off the Net for some time. The Network must always be available. It’s like the very old days of the Visa network, it was very slow, and if you could run fast enough from one ATM to another, you could do double spend, means get 2x more money than you currently had in your debit/credit card, as the previous transaction was not confirmed by the time you did the 2nd one.


#20

Double-spend is already prevented at the protocol level. It doesn’t matter if the nodes are online 24/7 or not. This is one of the reasons blockchains already work effectively today. When a block is added to a Cardano slot, it is automatically verified all the way back to the genesis block, which is what verifies all previous account balances via block hash linkages to prevent the double-spend.

The scenario we described already takes this process into account by giving the seller sufficient time to connect to the distant network to verify the buyer’s ADA account balance before processing the transaction The buyer’s HD wallet doesn’t need to be online for the seller to validate the buyer’s ADA account balance because the ADA is on the blockchain, running outside the outage area.

The scenario we’ve described assumes the Ouroboros protocol is running all the time somewhere on the planet. Thus, the protocol itself is not catastrophically taken down by the grid outage in any specific region.

I hope that helps clarify why our solution would work, but again, it would be slow and only practical for large-ticket transactions.