February 19, 2024

Fortress Bitcoin and Ethereum: Impervious to 51% Attacks, New Research Finds

Recent research conducted by Coin Metrics has unveiled a reassuring revelation: Bitcoin and Ethereum stand impervious to 51% attacks, thwarting any attempts by nation-state actors to dismantle their blockchains.

In a groundbreaking report released by Coin Metrics, it's now clear that the viability of nation-states launching destructive 51% attacks against the Bitcoin and Ethereum networks has dwindled to insignificance. The latest findings from this esteemed crypto intelligence firm underscore the exorbitant costs associated with such endeavors.

The concept of a 51% attack involves a malicious entity gaining control over the majority of the mining hashrate in a proof-of-work system like Bitcoin or a majority of staked cryptocurrency in a proof-of-stake network like Ethereum. Such control could enable attackers to manipulate the blockchain, disrupting transactions or executing double spends, thus undermining trust in the network.

Published on Feb. 15, the report authored by Coin Metrics researchers Lucas Nuzzi, Kyle Waters, and Matias Andrade elucidates the impracticality of sustained nation-state attacks, primarily due to the prohibitive expenses involved. Employing the metric 'Total Cost to Attack' (TCA), the research quantifies the financial outlay required to orchestrate such assaults.

Through the lens of TCA, the report conclusively demonstrates that attacking either the Bitcoin or Ethereum networks lacks profitability, dissuading nefarious actors from such endeavors. Even in the most lucrative hypothetical scenario, where an attacker could potentially reap $1 billion after investing $40 billion, the rate of return would be a mere 2.5%.

The analysis further reveals the staggering magnitude of resources necessary for a 51% attack on Bitcoin, estimating a requirement of 7 million ASIC mining rigs, translating to a colossal expenditure nearing $20 billion. Notably, such a volume of ASIC rigs is simply unavailable in the market, prompting considerations of alternative attack vectors.

Addressing concerns over a potential 34% staking attack on Ethereum by Lido validators, the report dispels notions of imminent threat. Despite the proliferation of liquid staking derivative providers like LidoDAO, the report asserts that launching an attack would not only be arduous but also astronomically costly, requiring a budget exceeding $34 billion and meticulous management of over 200 nodes.

Castle Island Ventures partner Nic Carter lauds Coin Metrics' research as a seminal contribution, emphasizing its empirical rigor and unprecedented clarity. This comprehensive analysis marks a significant milestone in the field, dispelling uncertainties and fortifying confidence in the resilience of Bitcoin and Ethereum against adversarial attacks.

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