Key Points
- Coin Metrics, a crypto analytics firm, has stated that 51% attacks on Bitcoin and Ethereum blockchains are no longer feasible due to the astronomical costs involved.
- A 51% attack, which could disrupt the network by preventing new transactions or reversing transactions for double-spending, is now unviable due to the high costs.
- Researchers used a metric called “Total Cost to Attack” (TCA) to determine the exact costs of such attacks on Bitcoin and Ethereum, noting that there are no profitable avenues for these attacks.
- Launching a 51% attack on Bitcoin would require around 7 million ASIC mining rigs, costing an estimated $20 billion.
- Concerns about a possible 34% staking attack from Lido validators on the Ethereum network are considered to be overblown, with the costs and time investment making such an attack unlikely.
51% Attacks on Bitcoin and Ethereum Deemed Unfeasible
Coin Metrics, a crypto analytics firm, recently released research findings asserting that 51% attacks on Bitcoin and Ethereum blockchains are no longer feasible.
The report indicates that the costs involved in such attacks would be prohibitively high, making them unviable.
A 51% attack refers to a scenario where a malicious entity gains control of over 51% of the mining hash rate in a proof-of-work system like Bitcoin, or 51% of staked crypto in a proof-of-stake network like Ethereum.
Such control could potentially enable the attacker to manipulate the blockchain, undermining its trustworthiness and leading to significant consequences.
Details of the Coin Metrics Report
Coin Metrics researchers Lucas Nuzzi, Kyle Water, and Matias Andrade used a metric known as “Total Cost to Attack” (TCA) to determine the exact costs of launching such attacks on Bitcoin and Ethereum.
Their findings indicate that there are no profitable avenues for attacking these two blockchains.
The report notes: “In none of the hypothesized attacks presented here [would the attacker] be able to profit by attacking Bitcoin or Ethereum.
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.”
Cost of Attacking Bitcoin Network
After examining both secondary market data and real-time hash rate output, the report determined that orchestrating a 51% attack on Bitcoin would require a massive 7 million ASIC mining rigs.
This would amount to an estimated cost of around $20 billion.
Given the scarcity of available ASIC rigs in the market, the report considered another potential avenue for attack.
The researchers contemplated a case where an exceptionally determined actor could exploit the network by fabricating their own mining rigs.
Even in this scenario, where a nation-state adversary possesses the resources to fabricate their own mining rigs, specifically considering the Bitmain AntMiner S9 as the only viable device for reverse engineering and production, the projected cost would still exceed $20 billion.
34% Attack on Ethereum Deemed Improbable
The report also addressed concerns about a possible 34% staking attack originating from Lido validators on the Ethereum network.
It indicated that such fears are overblown.
The expansion of Liquid Staking Derivative (LSD) providers, particularly LidoDAO, has raised concerns about potential risks to the Ethereum ecosystem.
However, the report countered these apprehensions.
The researchers concluded that orchestrating an attack on the Ethereum blockchain using LSDs would not only involve a significant time investment but also entail exorbitant costs.
This greatly reduces the likelihood of such an occurrence.
“We estimate an attack on Ethereum would take 6 months due to the churn limit preventing stakes from being deployed all at once.
That would cost over 34B USD. The attacker would have to manage over 200 nodes and spend 1M USD on AWS alone,” noted the researchers.
