Breaking BFT: Study Reveals Exorbitant Expenses Involved in 51% Attacks on Bitcoin and Ethereum
A groundbreaking study conducted by Lucas Nuzzi, Head of R&D at CoinMetrics, has provided unprecedented insights into the costs associated with orchestrating a 51% attack on the leading blockchain networks, Bitcoin and Ethereum. Titled "Breaking BFT," the research delves into the economic and logistical challenges of such attacks, shedding light on the robustness of blockchain security.
In this study, Nuzzi introduces an innovative analytical framework called the Total Cost to Attack (TCA), which calculates the total expenses incurred by an attacker in carrying out a 51% attack. For Bitcoin, this involves acquiring a majority of ASIC miners and covering operational costs like electricity. Utilizing data from MINE-MATCH and historical ASIC market trends, the research estimates that procuring the necessary ASICs for a Bitcoin attack could reach a staggering $20 billion.
The study also explores the scenario of a nation-state producing ASICs specifically for launching an attack. It concludes that reverse-engineering the S9 model, with a manufacturing cost exceeding $20 billion, is the only plausible option. This highlights the immense financial challenges and technical barriers involved in executing such an attack.
Turning attention to Ethereum, the study estimates that an attack on this network would cost over $34 billion. This figure takes into account the need to manage more than 200 nodes and spend $1 million USD on Amazon Web Services (AWS) alone, showcasing the intricate logistical requirements of targeting Ethereum.
Furthermore, the research evaluates the potential profitability of attacking Bitcoin or Ethereum through methods such as double spends and MEV (Miner Extracted Value) exploits. However, it concludes that there are no viable methods for an attacker to profit from these networks. This emphasizes the economic disincentives and strengthens the security and resilience of Bitcoin and Ethereum.
A notable finding from the study is the empirical evidence supporting the existence of a Nash Equilibrium in the security dynamics of both networks. This suggests that adversarial actions become unattractive when compared to other strategies, reinforcing the robustness and strength of these networks.
Overall, the study quantifies the immense costs associated with potential 51% attacks on Bitcoin and Ethereum and reinforces the resilience of their security mechanisms. Through economic analysis, it contributes to a deeper understanding of the durability of these networks against threats.
Frequently Asked Questions (FAQ)
Q: What is the focus of the groundbreaking study conducted by Lucas Nuzzi?
A: The focus is on the exorbitant expenses involved in orchestrating a 51% attack on Bitcoin and Ethereum.
Q: What is the analytical framework used in the study?
A: The Total Cost to Attack (TCA) framework is used to calculate the total expenses of a 51% attack.
Q: How much could acquiring the necessary ASIC miners for a Bitcoin attack cost?
A: The cost could soar to an astonishing $20 billion.
Q: What are the financial and technical challenges of executing a 51% attack?
A: The study highlights the challenges of acquiring the necessary equipment and the technical barriers, such as reverse-engineering ASIC models.
Q: How much would it cost to attack the Ethereum network?
A: The cost could exceed $34 billion, including managing nodes and significant AWS expenses.
Q: Can an attacker profit from attacking Bitcoin or Ethereum?
A: There are no viable methods for an attacker to profit, emphasizing the economic disincentives.
Q: What is the Nash Equilibrium in the context of the study?
A: It implies that adversarial actions become unattractive when compared to other strategies, reinforcing the security of these networks.
Definitions:
- 51% attack: A situation where a single entity or group gains control of a majority of the computing power in a blockchain network, enabling them to manipulate transactions.
- ASIC miners: Hardware devices designed to mine cryptocurrencies efficiently.
- MEV (Miner Extracted Value): The potential profit miners can extract from the order of transactions they include in a block.
Analyst comment
Positive news: The study highlights the exorbitant expenses involved in orchestrating a 51% attack on Bitcoin and Ethereum, reinforcing the resilience and security of these networks. The Total Cost to Attack (TCA) framework quantifies the costs, with estimates reaching $20 billion for Bitcoin and over $34 billion for Ethereum. The study also concludes that there are no viable methods for attackers to profit from these networks, emphasizing the economic disincentives. The existence of a Nash Equilibrium further strengthens the security dynamics of both networks.
Market analysis: The study’s findings will likely have a positive impact on the market. Investors and users will be reassured by the high costs and technical barriers associated with a 51% attack, increasing confidence in the security of Bitcoin and Ethereum. This could lead to increased demand and potentially drive up prices in the long term.
