A Recent Study Reveals the Cost and Viability of a 51% Attack on Bitcoin and Ethereum
A recent study led by Lucas Nuzzi, Head of R&D at CoinMetrics, has provided detailed insights into the financial viability of launching a 51% attack on the blockchain giants, Bitcoin and Ethereum. The study, titled “Breaking BFT,” explores the economics and logistical challenges of such attacks, shedding light on blockchain security.
How Much Does a 51% Attack on Bitcoin Cost?
Nuzzi took to X (formerly Twitter) to share the study’s findings, highlighting the concerns within the crypto community regarding the vulnerabilities of these networks. He emphasized that although these attacks are often discussed, their costs and expected utility remain unknown.
The study introduces a new analytical framework called Total Cost to Attack (TCA), which calculates the expenses involved in orchestrating a 51% attack. For Bitcoin, this includes acquiring a majority of ASIC miners and covering operational costs like electricity. The research reveals that obtaining the necessary ASICs could cost around $20 billion.
The study also considers the scenario of a nation-state manufacturing ASICs for an attack, concluding that it would be technically and financially challenging.
How Much Does a 51% Attack on Ethereum Cost?
Turning its focus to Ethereum, the study estimates that an attack would cost over $34 billion. This figure takes into account managing over 200 nodes and spending $1 million USD on Amazon Web Services alone, illustrating the complex logistics involved.
The research debunks the belief that an attacker could leverage LSDs to gain access to block templates and highlights that attacking Ethereum would take six months due to limitations on deploying stake all at once.
No Profitable Gains from Attacking Bitcoin or Ethereum
The study also evaluates the potential profits from attacking Bitcoin or Ethereum, considering strategies like double spends and MEV exploits. It concludes that there are no ways for attackers to profit from such attacks, emphasizing the economic disincentives.
Additionally, the study provides empirical evidence supporting the existence of a Nash Equilibrium in the security dynamics of Bitcoin and Ethereum. This suggests that adversarial actions become unattractive compared to other strategies.
In conclusion, the study quantifies the significant costs associated with potential 51% attacks on Bitcoin and Ethereum while reaffirming the strength of their security mechanisms. By offering a comprehensive economic analysis, it contributes to a deeper understanding of blockchain security and the resilience of these networks against threats.
At press time, BTC traded at $52,068.
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