Say Goodbye to Double Spend Attacks! Coin Metrics: Bitcoin and Ethereum Are Immune to 51% and 34% Attacks

According to the latest research from the cryptocurrency intelligence company Coin Metrics, the cost of an attack has grown to astronomical levels as the blockchain scales, making such attacks almost economically infeasible. In other words, the Bitcoin and Ethereum networks are now immune to 51% and 34% attacks based on their consensus mechanisms.

What are 51% and 34% Attacks?

51% Attack

Firstly, a 51% attack is a potential threat to blockchain networks that operate on the Proof of Work (PoW) consensus mechanism.

A single entity or organization controlling over 51% of the network's computational power can manipulate the network, including altering transaction sequences, preventing transaction verifications, executing double spend attacks, and undermining the network's security and credibility.

Generally, as the blockchain network grows, the likelihood of one individual or group acquiring enough computational power to overpower all other validators or participants decreases rapidly.

Additionally, since each block is cryptographically linked and modifying earlier confirmed blocks becomes increasingly costly over time.

34% Attack

On the other hand, a 34% attack targets blockchain networks operating on the Proof of Stake (PoS) consensus mechanism, utilizing the staking mechanism within the blockchain for the attack.

In this type of attack, the attacker controls over 34% of the total staked tokens in the network to manipulate its operations and conduct similar attacks as mentioned above.

Both of these attacks pose severe security threats, disrupting the operational integrity of the blockchain, eroding trust, and leading to significant losses.

Previously, Ethereum Classic (ETC) and Bitcoin Cash (BSV) have experienced multiple 51% attacks, resulting in losses exceeding millions of dollars.

Coin Metrics: BTC and ETH Networks Immune to 51% and 34% Attacks

According to a report by Coin Metrics on the 15th, targeting Bitcoin or Ethereum networks with 51% and 34% attacks is no longer feasible due to the high costs and minimal profits involved.

It's noted that the report introduces a new metric called "Total Cost of Attack (TCA)" to accurately quantify the costs associated with such attacks, stating:

Even though the costs and benefits of carrying out these attacks are difficult to estimate accurately, it appears that attacking the Bitcoin or Ethereum networks is no longer profitable, eliminating the economic incentives for malicious attackers.

Cost of Bitcoin 51% Attack Exceeds $20 Billion

Based on current market data and computational power, Coin Metrics estimates that a 51% attack on Bitcoin would require purchasing around 7 million mining machines, costing about $20 billion, a supply that the market currently lacks.

Furthermore, even if entities were to manufacture these machines themselves, the massive production costs would also surpass $20 billion.

Cost of Ethereum 34% Attack Exceeds $34 Billion

Coin Metrics also found that a 34% attack on Ethereum is similarly impractical, not only due to the high costs but also the extremely time-consuming nature of such an attack.

The report explains that concerns have been raised by participants in the Ethereum network over the substantial growth of Chain-agnostic Staking Derivatives (LSD) providers like Lido, potentially posing a threat to the network's decentralization.

Lido Accounts for Over 30% of the Liquidity Staking Market! Does Ethereum's 22% Validation Limit Really Need to Be Changed?

However, Coin Metrics indicates that launching a 34% attack on the Ethereum network, given the network's limitations on individual staking amounts, would take at least 6 months:

This would cost over $34 billion, with the attacker needing to manage over 200 nodes through AWS services, incurring costs exceeding millions of dollars.

Finally, the research team emphasizes in their conclusion:

In all the attacks assumed in the experiment, even with the most profitable double spending attack, the attacker can only earn $1 billion after spending $4 billion, considering all costs, making the return on investment extremely low.

They also add, "The current scale and status of Bitcoin and Ethereum's development have rendered such attacks economically infeasible."