With Bitcoin reclaiming the $1T market cap after two years, crypto’s most-feared 51% attack theory is back. Blockchains, due to their decentralized nature, are susceptible to this kind of security vulnerability, where a bad actor seizes control of more than 51% or 34% of the network’s hashing power. Although the outcome can be catastrophic for the blockchain’s security and integrity, there is little information about the costs and incentives to mount such massive attacks.
Experts at Coin Metrics have carried out simulated attacks and dissected the risks associated with the so-called boogieman of blockchain security. First, they have compiled the total expenses an attacker would incur using a new model called Total Cost to Attack [TCA]. Bitcoin’s TCA would include the price of 51% of the ASICs active in the network, along with the electricity costs.
The researchers found out that the likely attacker would have to buy 7 million ASICs for a whopping $20 billion, a figure too costly for a single person or entity to incur. But what if a nation-state attacker has the resources to produce ASICs exclusively for an attack?
Coin Metrics has also simulated such scenarios, and after experimenting with many models, it found that the likely contenders are the S9, with a manufacturing cost of $20 billion, and the S21 Bitcoin mining devices. The latter might cost a quarter of the amount, but its sophistication might create supply chain issues.
Bitcoin and Ethereum: Cracking the Code Comes At A Fortune
Similarly, taking control of 34% of the Ethereum validators. is not an easy task. According to the Coin Metrics report, the attacker would have to wait for 6 months to gain access to block templates due to the churn limit, which costs over $34 billion. Taking all this into consideration, the experts have contended that the expenses involved in such an attack have never been higher.
Most importantly, we find no way the attacker would be able to profit from attacking Bitcoin or Ethereum. We also find no way for a nation-state attacker to continuously run a 51% / 34% attack if the goal is to destroy these networks. The possibility of retaliation techniques makes ideologically driven attacks costly at each retaliation round. In the end, the network survives.