According to the latest research from cryptocurrency intelligence firm Coin Metrics, the cost of attacks on blockchain networks has grown to astronomical levels, making such attacks unprofitable. In other words, the Bitcoin and Ethereum networks are now immune to 51% and 34% attacks based on consensus mechanisms.
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What are 51% and 34% attacks?
51% Attack
34% Attack
Coin Metrics: BTC and ETH Networks Immune to 51% and 34% Attacks
Bitcoin 51% Attack Costs Over $20 Billion
Ethereum 34% Attack Costs Over $34 Billion
First, a 51% attack is a potential attack on a blockchain network that operates on a proof-of-work (PoW) consensus mechanism. A single entity or organization gains control of over 51% of the hashing power to manipulate the entire network, including altering transaction orders, preventing transaction verifications, and executing double spend attacks, thereby compromising the network’s security and trustworthiness. Generally, as the blockchain network grows in scale, the possibility for an individual or group to acquire enough hashing power to suppress all other validators or participants rapidly diminishes. Additionally, the cost of modifying confirmed blocks earlier in the chain, as each block is cryptographically linked, increases over time.
On the other hand, a 34% attack targets blockchain networks that operate on a proof-of-stake (PoS) consensus mechanism, utilizing the staking mechanism within the blockchain for attacks. In this type of attack, an attacker gains control of over 34% of the total staked tokens in the network to control its operations and carry out similar attacks as mentioned above.
Both of these attacks pose serious security threats that disrupt the functioning of the blockchain and erode trust, resulting in significant losses. Previously, Ethereum Classic (ETC) and Bitcoin Cash (BSV) have experienced multiple 51% attacks, resulting in losses exceeding millions of dollars.
According to a report released by Coin Metrics on the 15th, 51% and 34% attacks on Bitcoin or Ethereum networks are no longer feasible due to their high costs and low profitability.
Coin Metrics introduced a new indicator called the Total Cost of Attack (TCA) in the report to accurately quantify the cost expenditure associated with these attacks. The report states that even though the costs and benefits of implementing these attacks cannot be accurately estimated, it appears that attacking the Bitcoin or Ethereum networks is currently not profitable, eliminating the economic motivation for malicious attackers. Coin Metrics estimates that a 51% attack on Bitcoin would require purchasing around 7 million mining machines, costing around $20 billion, and the actual market does not have enough equipment available for sale. Furthermore, even if entities can produce mining machines themselves, the substantial manufacturing costs would exceed $20 billion.
Similarly, Coin Metrics found that a 34% attack on Ethereum is also highly impractical, not only due to the high costs involved but also the extremely time-consuming nature of the attack. The report explains that providers of on-chain liquidity staking services, including Lido, have raised concerns among Ethereum network participants regarding its significant growth. However, Coin Metrics states that launching a 34% attack on the Ethereum network, considering the network’s limitations on individual staking amounts, would require at least six months to accomplish. This would cost over $34 billion, and the attacker would need to manage over 200 nodes through AWS services, incurring costs of over millions of dollars.
In conclusion, the research team emphasizes that, considering all the costs, even in the most profitable scenario of executing a double spend attack, attackers would only earn $1 billion after spending $40 billion. The current development and scale of Bitcoin and Ethereum have made these attacks economically unviable.
51% attack
Coin Metrics
Ethereum
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Double spend attack
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