BTC and ETH safe from 51% attacks, Coin Metrics cites using cost barriers

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Crypto intelligence agency Coin Metrics has revealed in its newest analysis that it has turn out to be impractical for nation-states to dismantle the BTC and ETH community by way of 51% assaults, given the prohibitive bills concerned.

A 51% attack entails gaining majority management over a community’s hash charge in proof-of-work programs like Bitcoin or staking in proof-of-stake networks reminiscent of Ethereum, permitting for potential manipulation of the blockchain.

The research, carried out by Lucas Nuzzi, Kyle Waters, and Matias Andrade of Coin Metrics, introduces the “Complete Value to Assault” (TCA) metric to estimate the bills concerned in such malicious actions. Their findings recommend that attacking both Bitcoin (BTC) or Ethereum (ETH) wouldn’t be financially possible or worthwhile for attackers, primarily nullifying the motivation for such actions.

For Bitcoin, the try to achieve management would necessitate buying round 7 million ASIC mining rigs, an funding of about $20 billion. Nevertheless, the market lacks the provision of such an unlimited variety of ASIC rigs, and even when a possible attacker determined to fabricate them, the fee would nonetheless exceed $20 billion.

BTC and ETH safe from 51% attacks, Coin Metrics cites using cost barriers - 1
Producing S9 mining rigs would incur prices exceeding $20 billion | Supply: Coin Metrics

The state of affairs renders the assault not solely impractical but in addition economically inefficient, with probably the most advantageous double-spend assault yielding a mere 2.5% return on a hypothetical $40 billion expenditure to achieve $1 billion.

Ethereum faces the same scenario with its transition to a proof-of-stake mannequin, the place the report evaluated the feasibility of a 34% assault by Lido validators. The evaluation concluded that any try and compromise the Ethereum community utilizing Liquid Staking Derivatives (LSDs) could be each expensive, exceeding $34 billion, and time-consuming, taking as much as six months as a result of churn restrict, which restricts instant stake deployment.

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Attacking Ethereum with LSDs would value over $34 billion | Supply: Coin Metrics

Moreover, the logistical problem of managing over 200 nodes and incurring important bills, reminiscent of $1 million on Amazon Web Services, additional diminishes the plausibility of such an assault.

Nic Carter, a accomplice at Fortress Island Ventures, recommended the report for offering an in depth and empirical examination of the impracticality of 51% assaults on these main cryptocurrency networks.

He famous that earlier analyses lacked the concrete, data-driven strategy seen in Coin Metrics’ analysis, marking it as a pivotal contribution to understanding the safety and resilience of Bitcoin and Ethereum in opposition to potential nation-state-level threats.

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