51% Attacks on Bitcoin and Ethereum No Longer Viable
It is no longer viable for nation-states to destroy the Bitcoin (BTC) and Ethereum (ETH) networks through 51% attacks. According to the latest research from crypto intelligence firm Coin Metrics, the astronomical costs required to carry out such attacks make them impractical and unprofitable. A 51% attack refers to a malicious actor owning more than 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. This level of control theoretically enables attackers to manipulate the blockchain and undermine its integrity.
In the report, Coin Metrics researchers Lucas Nuzzi, Kyle Water, and Matias Andrade argued that the current cost of capital and operational expenses associated with achieving 51% control make continuous attacks by nation-state actors unfeasible. The researchers introduced a metric called “Total Cost to Attack” (TCA) to quantify the cost of attacking a blockchain network. Using this metric, the report concluded that there are no profitable avenues for attacking either the Bitcoin or Ethereum networks, rendering the financial incentive for nefarious attackers obsolete.
Ethereum’s 34% Attack Exaggerated
The report also addressed concerns about a potential 34% staking attack on the Ethereum network by Lido validators. Coin Metrics concluded that leveraging Liquid Staking Derivatives (LSDs) to attack the Ethereum blockchain would not only be time-consuming but also extremely expensive. The researchers estimated that an attack on Ethereum would take six months due to the churn limit preventing stake from being deployed all at once, with a cost exceeding $34 billion. The attacker would need to manage over 200 nodes and spend $1 million on Amazon Web Services (AWS) alone.
Experts, including Castle Island Ventures partner Nic Carter, praised Coin Metrics’ research as a significant contribution to the field. Carter highlighted that previous analyses had been vague or theory-driven, whereas this report provided a rigorous and empirical analysis of the impracticality of 51% attacks on Bitcoin and Ethereum.
This is 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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