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Bitcoin And Ethereum, Unlikely Targets Of 51% Attacks: Know The Reasons

-CoinMetrics reveals that a 51% attack on Bitcoin would require 7 million mining equipment, making this type of attack unfeasible due to its high costs.

On-chain cryptocurrency analytics firm CoinMetrics has released a new research report debunking blockchain takeover fears. They claim that the need for more powerful mining equipment and the cost of 51% of attacks make acquisitions unviable.

Even as the Bitcoin network prepares for a hash rate drop due to the halving. Lucas Nuzzi, researcher at CoinMetrics, claims that a 51% attack on Bitcoin would require 7 million mining rigs. Ethereum’s churn rate, which limits validator turnover, would require takeover attempts to last six months.

Cost Frustrates Bitcoin Acquisition

The company also found that the 51% and 34% ideological attacks against Ethereum and Bitcoin would be thwarted at different stages. If they had the resources, governments would need to spend more than $20 billion to mass-produce their version of the reverse-engineered Antminer S9 Bitcoin mining machine.

Alternatively, they would have to pay almost $20 billion to buy those machines on the open market:

“This is the first empirical evidence… in which adversarial actions become unattractive compared to other strategies, such as honest participation in the network or refraining from attacking.”

The researchers also estimate that mounting a 34% attack against liquid Ethereum staking protocols like Lido Finance and Rocket Pool would cost more than $34 billion in ETH. To do this, the hacker would have to manage more than 200 nodes and spend a million dollars on cloud services for six months.

Furthermore, common methods of cryptocurrency hacking, including double-spend hacks, selfish mining, and transaction fee market manipulation, would cost too much to be financially viable.

Bitcoin Halving Is The Perfect Enemy

According to crypto financial services company Galaxy Digital, the upcoming Bitcoin halving will cause many miners to leave the market. Halving reduces the profits of cryptocurrency mining and can drive out less energy-efficient mining machines.

Miner decline can be measured by a drop in hash rate, the number of times miners attempt to guess the hash of a block of Bitcoin transactions per second. A decrease in hash rate implies a decrease in online mining equipment and is used to indicate miners leaving the market. Galaxy explained:

“We estimate that approximately 15-20% of the network hash rate at the end of 2023 (86-115 EH) could be offline at the time of the halving. Based on our analysis, we expect the 2024 network hash rate to end up in a range between 675 EH and 725 EH.”

To counter the decline, the Bitcoin network will begin to adjust the difficulty as companies with more powerful machines could put the power in the hands of a few entities. As these computers become more powerful, it will be more difficult for governments to attempt a 51% attack.

Nuzzi stated that new machines, such as the Antminer S21, are more difficult to reverse engineer, making them difficult to reproduce. Therefore, appropriation attempts will always be playing catch-up.

BeInCrypto contacted mining company Core Scientific about the probability of a 51% attack after the halving. The company had yet to respond at the time of publication.

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