Coin Metrics Debunks the Myth of 51% Attacks on Bitcoin and Ethereum
According to recent research conducted by Coin Metrics, both Bitcoin (BTC) and Ethereum (ETH) are considered immune from 51% attacks. A 51% attack refers to a malicious actor owning more than 51% of the mining hash rate in a proof-of-work system or 51% of staked crypto in a proof-of-stake network.
The research from Coin Metrics indicates that it is no longer financially viable for nation-states or malicious actors to destroy the Bitcoin and Ethereum networks through 51% attacks. The astronomical costs associated with carrying out such attacks act as a deterrent. The report utilized a new metric called TCA (Total Cost of Attack) to quantify the cost of a 51% attack. It concluded that there are no profitable avenues for attacking either Bitcoin or Ethereum, nullifying the financial incentive for nefarious attackers to do so.
In the case of Ethereum, the transition to a proof-of-stake consensus mechanism has further increased the cost of a 51% attack. To carry out such an attack on the Ethereum blockchain, an entity would need to own more than 51% of the staked ETH on the network, which is a significant financial investment. Additionally, the consensus mechanism is designed to recognize and slash the staked ETH if an attack is detected, making it even more costly for the attacker.
The research highlights that the cost of manufacturing the necessary mining rigs for a 51% attack on Bitcoin would exceed $20 billion, further emphasizing the impracticality of such an endeavor.
It is important to note that while Bitcoin and Ethereum are considered immune from 51% attacks, smaller altcoins with lower market capitalizations may still be vulnerable. The research suggests that attacks on these smaller coins can be profitable if enough hashrate is purchased through mining rental services.
In conclusion, the research from Coin Metrics provides reassurance that Bitcoin and Ethereum are resilient against 51% attacks due to the exorbitant costs involved. This reinforces the security and integrity of these leading cryptocurrencies, making them attractive options for individuals and organizations seeking reliable and robust blockchain networks.
