CoinMetrics Research Highlights Impracticality of 51% Attacks on Bitcoin and Ethereum
CoinMetrics‘ research has shed light on the impracticality and high financial barrier associated with executing a 51% attack on Bitcoin and Ethereum. According to their findings, launching an attack on Bitcoin would cost over $20 billion, while compromising Ethereum would exceed $34 billion, making these attacks economically unfeasible.
A 51% attack is a potential threat in blockchain technology, where a group of miners or entities gain control of more than half of a network’s mining hash rate in Proof-of-Work (PoW) systems, or nodes in Proof-of-Stake (PoS) settings. This control could enable them to manipulate network transactions and double-spend coins. However, the size and strength of a network play a crucial role in its security, thus making larger networks like Bitcoin and Ethereum less vulnerable to such attacks.
CoinMetrics‘ research, led by Lucas Nuzzi, the head of research and development, quantifies the Total Cost to Attack (TCA) for both Bitcoin and Ethereum. The findings reveal that executing an attack on Bitcoin would require the purchase of approximately 7 million ASIC miners, a venture that could exceed $20 billion, significantly outweighing any potential gains. This cost estimation includes the market’s reaction to such a large-scale acquisition of ASICs.
Similarly, targeting Ethereum would be even more costly, with an estimated cost of over $34 billion. This figure takes into account Ethereum’s current metrics, including its price, the total amount of staked ETH, and the number of validators. The complexity of carrying out such an attack on Ethereum is further amplified by its PoS mechanism, which has a churn limit that prevents the immediate deployment of a large amount of stake. Consequently, the time required for an attack on Ethereum extends to over six months.
The research also explores the potential risk posed by Liquid Staking Derivatives (LSDs), such as those offered by staking services like Lido and RocketPool. While Lido controls a significant portion of staked ETH, Nuzzi clarifies that leveraging LSDs to manipulate block templates is not a viable strategy for attackers.
In conclusion, the costs associated with executing a 51% attack on either Bitcoin or Ethereum far surpass any potential benefits, making such attacks highly improbable. These findings provide reassurance to investors and participants in the cryptocurrency ecosystem, highlighting the robustness and resilience of these leading blockchain networks against potential threats.
Analyst comment
Positive news: CoinMetrics’ research reveals the high financial barrier and impracticality of executing a 51% attack on Bitcoin and Ethereum. The cost to attack Bitcoin would exceed $20 billion, while compromising Ethereum would surpass $34 billion, making these attacks economically unfeasible.
Market analysis: These findings provide reassurance to investors and participants in the cryptocurrency ecosystem, highlighting the robustness and resilience of Bitcoin and Ethereum against potential threats. It is unlikely for such attacks to occur, maintaining stability in the market.
