- New research by Coin Metrics has disclosed that the 51% attack on Bitcoin is no longer a viable option for any nation-state attacker to consider.
- The report also “rubbished” any possible attack on the Ethereum network, stating that it is too time-consuming and expensive to “pull the trigger.”
The introduction of blockchain technology into the internet space has over the past decade been classified as one of the best initiatives by any individual or group. However, its ability to act as a ledger to record transactions and information permanently could be nullified through a 51% attack.
According to experts, this type of attack is a huge threat to any crypto blockchain as any miner group who controls more than 50% of the mining hash rate gains the power to alter the blockchain. In this case, the attackers could prevent the confirmation of new transactions and halt payments between individuals.
As the possibility of any miner gaining this kind of power has become a common debate within various crypto forums, crypto intelligence firm Coin Metrics has conducted new research, putting the argument to bed. According to the research, 51% and 34% of attacks on Bitcoin and Ethereum are no longer possible.
The Coin Metrics researchers Lucas Nuzzi, Kyle Water, and Matias Andrade disclosed that the current cost of capital and operational expenses do not make the 51% attack a viable option. “Total Cost to Attack” (TCA) was used to determine the cost and benefit of such an attack, and it was observed that no nation-state attacker would spend $40 billion on an attack that could get them a potential $1 billion profit.
In none of the hypothesized attacks presented here [would the attacker]be able to profit by attacking Bitcoin or Ethereum. Consider that even in the most profitable double-spend scenario presented, where the attacker could potentially make $1B after spending $40B, that would account for a 2.5% rate of return.
More on the 51% Attack on Bitcoin
The report also disclosed to have comprehensively analyzed secondary market data and real-time hash rate output and observed that 7 million ASIC mining rigs, costing about $20 billion would be required to stage the 51% attack. Interestingly, the report also notes that there are not enough ASIC rigs in the market.
The researchers further took a look at the next option, where attackers could be financially efficient enough to manufacture their mining rigs. In this case, the only device that could be reverse-engineered for production is the Bitmain AntMiner S9, and it may cost not less than $20 billion.
Over the years, the Liquid Staking Derivative (LSD) provider (LidoDAO) has also been said to be a threat to the Ethereum network. According to the researchers, this could be an extremely expensive and time-consuming procedure to embark on. Nuzzi stated that the attackers would need six months to attack Ethereum and could spend about $34 billion on this. The difficulties come from the churn limit preventing stakes from being deployed all at once. They would also have to deal with over 200 nodes while spending $1 million on AWS alone.
The research has been lauded by some crypto key players including Castle Island Ventures partner Nic Carter. To him, this is the first time a report on the subject has been based on rigorous and empirical analysis.
This is an analysis that has never been possible before. This is a very significant contribution to the literature and one that I personally have been waiting for for a long time.
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