According to the latest research from crypto intelligence firm Coin Metrics, it is no longer feasible for nation-states to dismantle the Bitcoin and Ethereum networks via 51% attacks due to the exorbitant costs involved.
A 51% attack occurs when a malicious actor possesses over 51% of the mining hash rate in a proof-of-work system or 51% of staked crypto in a proof-of-stake network.
This power could be abused to manipulate the blockchain, compromising trust.
In a report released on February 15, Coin Metrics researchers Lucas Nuzzi, Kyle Waters, and Matias Andrade contended that nation-state attackers can no longer sustain such assaults due to the prevailing cost of capital and operational expenses needed to attain 51% control.
The researchers introduced a metric named “Total Cost to Attack” (TCA) to precisely gauge the expense of launching an attack on a blockchain network.
Utilising TCA, the report concluded that there are no financially rewarding avenues to attack either the Bitcoin or Ethereum networks, negating the financial incentive for malicious actors.
“In none of the hypothesized attacks presented here [would the attacker] be able to profit by attacking Bitcoin or Ethereum,” read the report.
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“Consider that even in the most profitable double spend scenario presented, where the attacker could potentially make $1B after spending $40B, that would account for a 2.5% rate of return.”
Analysing secondary market data and real-time hash rate output, the report revealed that a 51% attack on Bitcoin would necessitate an actor to procure a staggering 7 million ASIC mining rigs, costing approximately $20 billion.
Acknowledging the scarcity of available ASIC rigs, the report explored an alternative attack vector, which might be pursued by a particularly “relentless” actor.
Assuming a nation-state attacker could fabricate their own mining rigs—identifying the Bitmain AntMiner S9 as the only “plausible” device for reverse-engineering—it would still exceed a $20 billion investment.
Furthermore, the report debunked concerns over a potential 34% staking attack from Lido validators on Ethereum, suggesting it would be both time-consuming and financially prohibitive.
Castle Island Ventures partner Nic Carter commended Coin Metric’s research as “enormously important,” highlighting its rigorous empirical analysis as a significant contribution to the literature.
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