Recent research from Coin Metrics suggests that nation-states no longer have viable means to destroy the Bitcoin and Ethereum networks through 51% attacks. These attacks, which involve malicious actors controlling the majority of the mining hash rate or staked crypto, are now deemed economically unfeasible due to astronomical costs.
Coin Metrics researchers Lucas Nuzzi, Kyle Waters, and Matias Andrade utilized the “Total Cost to Attack” (TCA) metric to assess the feasibility of such attacks. Their findings indicate that the costs associated with mounting a 51% attack on Bitcoin or Ethereum outweigh any potential financial gains for the attacker.
To execute a 51% attack on the Bitcoin network, an actor would need to acquire an exorbitant number of ASIC mining rigs, estimated at around 7 million, costing approximately $20 billion. Even if a nation-state were resourceful enough to manufacture their own rigs, the expense remains prohibitively high.
Concerns over a potential 34% staking attack on the Ethereum network by Lido validators are also debunked in the report. While liquid staking derivatives (LSDs) providers like LidoDAO have raised apprehensions, the practicality of executing such an attack is questioned due to time constraints and prohibitive costs.
Castle Island Ventures partner Nic Carter lauded Coin Metric’s research as a significant contribution to the field. He highlighted the empirical nature of the analysis, which provides a concrete understanding of the challenges associated with nation-state attacks on blockchain networks.
The research from Coin Metrics dispels the notion that nation-states can effectively destroy Bitcoin and Ethereum through 51% attacks. With the exorbitant costs involved and the impracticality of execution, the integrity of these networks remains robust against such malicious threats.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up