Is Bitcoin Security Doomed Amid New SHA-256 Collision Attack?

• Crypto security firm OneKey has addressed the breakthrough in SHA-256 collision attacks.
• It involves generating identical hash values from 31 steps of the SHA-256 hashing process with two data inputs.
• OneKey argued its immediate impact on cryptocurrencies like Bitcoin is likely limited.

OneKey, a well-known open-source hardware and crypto wallet provider, recently addressed the viral tweet claiming a breakthrough in SHA-256 collision attacks. While the news sent ripples through the crypto community, OneKey assures that it calls for no panic.

For context, SHA-256 is a fundamental cryptographic algorithm widely used in various digital security applications, including cryptocurrencies like Bitcoin. The recent breakthrough involves finding two different inputs that produce identical hash values. 

Emphatically, it refers to finding two data inputs that generate the same intermediate hash value after 31 steps of the SHA-256 hashing process. The implication is that the SHA-256 collision attack could be used to forge data or compromise security.

Notably, this breakthrough was presented at a recent academic conference. Three Chinese university researchers authored the paper “New Records in Collision Attacks on SHA-2,” which has now been accepted by EUROCRYPT 2024, one of the three flagship conferences in cryptography.

OneKey argued that while the breakthrough is real, its immediate impact on cryptocurrencies like Bitcoin is likely limited. Furthermore, OneKey clarified that the success of a collision attack on SHA-256 does not inherently impact mining difficulty . 

Moreover, the firm noted that if the collision attack can expedite the discovery of specific hash values, it would directly influence mining. Otherwise, its direct effect on mining operations remains constrained.

Meanwhile, OneKey speculated that if SHA-256 were genuinely compromised, there could be a widespread erosion of trust in digital security, sparking a global crisis. The security firm predicts emergency shutdowns of banking systems and government institutions.

However, OneKey also highlighted that cryptocurrencies can undergo forks and upgrades to combat such threats effectively. Specifically, for Bitcoin, addressing such a severe situation would necessitate the implementation of Bitcoin Improvement Proposals (BIP) and a hard fork to enhance the core cryptographic algorithm.

Ultimately, the security firm reassured that Bitcoin developers and the community are diligently monitoring the situation and ready to implement security upgrades as needed.