Cryptocurrency intelligence company Coin Metrics has conducted a study indicating that Bitcoin and Ethereum are essentially immune to potential 51% attacks and 34% attacks due to the enormous cost of attack and extremely low return on investment.
The cost of attacking Bitcoin and Ethereum?
Bitcoin’s 51% attack cost exceeds $20 billion
Ethereum’s 34% attack cost exceeds $34 billion
In a research report released by Coin Metrics on February 15, it was pointed out that due to the huge cost of attack, attackers would have little to no profit even if they succeeded. Currently, the Bitcoin and Ethereum networks are highly unlikely to suffer from 51% attacks and 34% attacks at the consensus mechanism level.
How much does it cost to attack Bitcoin and Ethereum?
In this report, a team of analysts led by Lucas Nuzzi, Head of Research at Coin Metrics, introduced a new indicator called “Total Cost of Attack (TCA)” to accurately quantify the cost associated with such attacks. The conclusion drawn was:
Bitcoin’s 51% attack cost exceeds $20 billion
We know that a 51% attack is a potential attack method against blockchain networks based on the Proof of Work (PoW) consensus mechanism. If a single entity or organization controls over 51% of the computing power, they can make changes to the entire network, such as modifying transaction order, preventing transaction verification, and launching double spend attacks, thus compromising the security of the network.
However, according to Coin Metrics’ report, based on the current market data and computing power, to launch a double spend attack on Bitcoin, one would need to purchase approximately 7 million mining machines, which would cost a staggering $20 billion. In reality, the current market does not have enough equipment to meet such demand. Additionally, even if certain entities (such as a national entity) could produce mining machines themselves, the production cost alone would exceed $20 billion.
Bitcoin’s 51% attack total cost
Ethereum’s 34% attack cost exceeds $34 billion
Similarly, a 34% attack is an attack method against blockchains such as Ethereum that are based on the Proof of Stake (PoS) consensus mechanism. Attackers only need to possess over 34% of the total staked tokens on the network to control its operation.
However, the Coin Metrics report states that launching a 34% attack on Ethereum is also impractical, as it would require enormous cost and consume significant time.
Ethereum’s 34% attack total cost
Finally, the Coin Metrics research team concludes:
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