Is a 51% Attack Feasible for Bitcoin and Ethereum?
A recent study has shed light on the security measures of Bitcoin and Ethereum, suggesting that executing a 51% attack on these top blockchains is financially unviable. A 51% attack occurs when a single miner or group of miners controls more than half of a blockchain network's hash rate, granting them the power to manipulate transactions and tamper with blockchain data.
The Financial Implications
According to the study, launching a 34% attack on the Ethereum network would require an attacker to have around $34.39 billion. This estimate is based on the Ethereum price of $2,279, a total staked ETH amounting to 28.8 million ETH, and a validator count of 899,840 validators. Moreover, if the attack were to commence on December 31, 2023, the attacker would need until June 14, 2024, to breach the 33% threshold and gain control over the network.
Attacking Bitcoin is equally improbable. Researchers estimate that the attacker would face production expenses exceeding $20 billion. This is due to the need to manufacture nearly 40 million units of the S9, the most powerful ASIC available at the time of the study. Alternatively, using the upcoming Bitmain S21 would cost approximately $5.6 billion by December 2023, representing a quarter of the expense of using the S9.
Security Measures and Nash Equilibrium
The findings of the study demonstrate that the current security measures in place for Bitcoin and Ethereum have made 51% attacks economically unfeasible. The costs and dangers associated with such attacks are significantly higher than the potential benefits. This empirical evidence supports the concept of Nash Equilibrium, where the equilibrium is reached when no player can unilaterally change their strategy to achieve a better outcome.
Other Networks Face Risks
While the assessment holds true for Bitcoin and Ethereum, many other networks are not as secure. In 2021 alone, Bitcoin SV experienced three instances of 51% attacks. Similarly, the lesser-known crypto Firo also faced a similar ordeal. Even Ethereum Classic was not spared from rogue actors attempting to manipulate the network.
Overall, the study highlights the robust security setups of Bitcoin and Ethereum, providing reassurance to their users. However, it also serves as a reminder that security should remain a priority, especially for lesser-known networks susceptible to 51% attacks.
Analyst comment
Neutral news: The recent study indicates that executing a 51% attack on Bitcoin and Ethereum is financially unviable within their current security setups. The costs and dangers associated with such attacks outweigh the potential benefits, thus providing empirical evidence of Nash Equilibrium in these networks. However, it is mentioned that other networks, such as Bitcoin SV, Firo, and Ethereum Classic, have experienced 51% attacks.
Market analysis: The market for Bitcoin and Ethereum is expected to remain stable and secure, with the current security measures deterring potential attackers. However, investors may exercise caution when considering lesser-known cryptocurrencies as they may be more susceptible to 51% attacks.
