Coin Barometer Report: Why 51% of Attacks on Bitcoin and Ethereum Are Not Threats
A recent study by Coin Metrics found that 51% of attacks on Bitcoin and Ethereum networks were impractical, debunking fears of network manipulation by nation-states.
Total Attack Cost: New Metric
Coin Indicators Researchers introduced the Total Cost of Attack (TCA) metric to evaluate the financial feasibility of launching 51% of attacks on blockchain networks.
According to a recent report from Coin Metrics, it is no longer possible for a nation-state to disrupt the Bitcoin (BTC) and Ethereum (ETH) networks via a 51% attack. Studies have shown that the enormous costs associated with executing these attacks make them economically unfeasible.
The study, authored by Coin Metrics researchers Lucas Nuzzi, Kyle Water and Matias Andrade, explores the concept of a 51% attack, in which a malicious actor gains majority control over the mining hash rate in a proof-of-work system such as Bitcoin or a staked cryptocurrency. Explore. On proof-of-stake networks like Ethereum. The ability to manipulate the integrity of a blockchain theoretically entails such control.
Coin Metrics’ research challenges the notion that nation-states carry out sustained 51% attacks on blockchain networks due to the impracticality and lack of profitability associated with such efforts.
The report uses an innovative Total Cost of Attack (TCA) metric to estimate the overall cost of executing 51% of attacks on Bitcoin and Ethereum. Studies have shown that there is virtually no financial incentive for malicious actors to carry out these attacks.
The study found that even in the most profitable double-spend scenario, where an attacker could potentially earn $1 billion after investing $40 billion, the return on investment was only 2.5%. The report highlights the enormous challenges and enormous costs of executing such attacks at scale.
For Bitcoin, the report estimates that a 51% attack would require the purchase of about 7 million ASIC mining rigs, worth about $20 billion. However, the lack of ASIC equipment makes such attacks logically impossible.
Also Read: 3 Altcoins to Consider Before Bitcoin Halving in 2024
Likewise, attacking the Ethereum network requires extensive resources, with estimates exceeding $34 billion, including the need to manage over 200 nodes and significant costs on services such as Amazon Web Services (AWS).
Coin Metrics also addresses concerns about a potential 34% staking attack on the Ethereum network by Lido validators, dismissing it as time-consuming and financially unfeasible.
Experts praise Coin Metrics’ research for making groundbreaking contributions to the field and providing empirical evidence that dispels fears of large-scale network manipulation by nation-states. The rigorous analysis provides confidence to stakeholders within the cryptocurrency ecosystem, highlighting the resilience of the Bitcoin and Ethereum networks against hostile actors.
This is a very important paper, so please read it. https://t.co/4IVy9Y4AUm
— nic 🌠 op_cat-er (@nic__carter) February 15, 2024