Crypto analytics firm Coin Metrics concluded that conducting 51% attacks on Bitcoin and Ethereum is no longer feasible for nation-states due to the prohibitively high costs involved. The report assessed the costs, concluding that the potential returns would not justify the huge expenses. It also debunked concerns about a possible 34% staking attack on the Ethereum network.
Our analysis of the situation
Cryptocurrency enthusiasts, rejoice! Recent research by Coin Metrics has dropped a bombshell on potential attackers eyeing the Bitcoin and Ethereum networks. According to the report, the daunting costs involved in orchestrating a 51% attack on the blockchains of these two giants would make any malicious entity think twice before attempting such a feat.
For those unfamiliar with the concept, a 51% attack empowers a malevolent force to manipulate the blockchain's integrity by controlling the majority of its computing power. This control opens the door to a Pandora's box of fraudulent activities, including double-spending and transaction tampering, jeopardizing the trustworthiness of the network.
Coin Metrics’ researchers, Lucas Nuzzi, Kyle Water, and Matias Andrade, have introduced the concept of “Total Cost to Attack” (TCA) to dissect the exorbitant expenses associated with attacking Bitcoin and Ethereum. To put this into perspective, initiating a 51% attack on Bitcoin would necessitate a whopping 7 million ASIC mining rigs, roughly translating to a jaw-dropping $20 billion. And that’s just the tip of the iceberg; the scarcity of available ASIC rigs further complicates the already arduous endeavor.
But wait, it gets even better. The report also delved into the potential exploit of the Ethereum network via Liquid Staking Derivative (LSD), debunking the fretful notions surrounding a purported 34% staking attack originating from Lido validators. The researchers shot down these concerns by emphasizing the daunting time investment and exorbitant costs associated with pulling off such an audacious move, presenting a grim scenario for any potential wrongdoers.
In a nutshell, Coin Metrics’ revelations have dealt a severe blow to the aspirations of any nefarious actors eyeing the crypto domain. With the massive financial hurdles staring them right in the face, it seems the days of 51% attacks wielding any substantial threat to Bitcoin and Ethereum are over – at least for now. So, let’s raise a virtual toast to tumultuous times being kept at bay in the crypto world, courtesy of Coin Metrics’ illuminating insights. Cheers to secure blockchains and dwindling attack possibilities!
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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