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Let me first describe the scene for you:
I'm a person i just woke up in the middle of the night, and i notice something strange has happened around me.
Now if i say
"What could have caused all this?"
to the person next to me.
Is this sentence correct?
Is this equal to "What could possibly cause all this?"
I used the first one, but someone pointed out that its not correct, i disagree, so please tell me is the first sentence incorrect ?
The meaning of both choices is basically the same, it's just a matter of tense. The phrasing "what could have caused" puts whatever happened in the past. Something happened, and now you're trying to figure out what caused it. The phrasing "what could cause" connects the unusual occurrence more to the present - something is happening, and you're trying to figure you what is causing it.
The way you've described the situation, the phrasing "what could have caused all this" sounds more natural - something happened while you were sleeping, and now you're trying to figure out the cause.
The question "What could have caused all this?" is completely correct. It's correct because it doesn't contain any errors; if someone tells you that it's incorrect, ask them what they think the error is. The question "What could possibly cause all this?" is also completely correct.
However, the two sentences have slightly different meanings.
The question "What could have caused all this?" is asking what could have been the actual cause of the one, individual, actual event which actually occurred. The fact that "have caused" is in the perfect infinitive indicates that the question is asking about the past—specifically, about that past event.
On the other hand, the question "What could possibly cause all this?" is asking what sort of force could cause an event similar to the event which occurred. The fact that "cause" is in the plain infinitive indicates that the question is not asking about a particular event in the past.
The word "possibly" places additional emphasis on the fact that the event which occurred is seemingly impossible.
