Bitcoin and Ethereum Unlikely Targets for 51% Attacks, Says CoinMetrics Research
A recent research report by on-chain crypto analytics firm CoinMetrics has indicated that Bitcoin and Ethereum are highly unlikely to be targeted in 51% attacks due to the significant resources required for such endeavors. The report emphasizes the need for more powerful mining rigs and the associated costs, making blockchain takeovers nearly impossible.
Bitcoin Faces Potential Decline in Hashrate
As Bitcoin's network prepares for the upcoming halving, there are concerns about a potential decline in hashrate. CoinMetrics warns that mounting a 51% attack on Bitcoin would demand a staggering 7 million mining rigs, owing to the cost and logistics involved. This level of investment and infrastructure makes a successful attack highly improbable.
Ethereum's Validator Turnover Limits Takeover Potential
The research report also touches on Ethereum, highlighting that the network's churn rate places limits on validator turnover. This suggests that any attempt to launch a takeover would need to last at least six months, making it an arduous and improbable task.
Cost Inefficiencies Deter Adversarial Actions
CoinMetrics researcher Lucas Nuzzi provides empirical evidence to support the conclusion that attacking Bitcoin and Ethereum presents significant cost inefficiencies. It is far more favorable for entities to participate or abstain from such actions due to the substantial expenditures required.
Daunting Costs to Attack Ethereum Staking Protocols
The report specifically highlights the estimates for attacking Ethereum's liquid staking protocols such as Lido Finance and Rocket Pool. A 34% attack on these protocols would necessitate over $34 billion in ETH, managing more than 200 nodes, and spending $1 million on cloud services over a six-month period. These costs render common crypto attack strategies like double spending, selfish mining, and fee market manipulation inviable.
Impact of Bitcoin Halving
The upcoming Bitcoin halving is expected to result in a reduction in mining profitability and the exit of less energy-efficient miners from the network. This decrease in hashrate could reach 15-20% according to Galaxy Digital's projections. To mitigate the effects of this drop-off and to prevent the consolidation of power among entities with more powerful machines, the Bitcoin network will adjust its difficulty. This adjustment makes it increasingly difficult for potential attackers to mount a 51% attack. Newer mining machines like the Antminer S21 offer advanced technology that is challenging to reverse-engineer, further enhancing the security of the network.
Analyst comment
Positive news: The research report suggests that Bitcoin and Ethereum are unlikely targets of 51% attacks due to the high costs and logistical challenges involved. Attacking these networks would require a significant amount of resources and would be less attractive than participating or abstaining. The upcoming Bitcoin halving may lead to a decrease in mining profitability, but the network will adjust its difficulty to mitigate the impact and make it harder for potential attackers. As a result, the market is expected to remain stable and secure.
