A recent study led by Lucas Nuzzi, head of R&D at CoinMetrics, has brought to light detailed information on the financial viability of launching a 51% attack against blockchain giants, bitcoin and ethereum. Published under the title “Breaking BFT,” this research delves into the economic and logistical challenges of such attacks, offering a nuanced understanding of blockchain security.
How much does a 51% attack on bitcoin cost?
Nuzzi took to X (formerly Twitter) to share the study's findings, emphasizing prevailing concerns within the crypto community about network vulnerabilities. He commented: “The mere possibility of these types of attacks has caused significant anxiety… These are the bogeyman of blockchain security, but their costs and expected utility remain a mystery.”
How much does it cost to attack 51% bitcoin and ethereum?
To find out, we simulated what an attack would be like.
Our article, Breaking BFT, was published today with some interesting results https://t.co/fpcpkPhy5B pic.twitter.com/wMbm6b2v0Z
—Lucas Nuzzi (@LucasNuzzi) February 15, 2024
The study introduces a new analytical framework, the Total Cost of Attack (TCA), which summarizes the expenses an attacker would incur when orchestrating a 51% attack. For bitcoin, this involves acquiring the majority of ASIC miners and covering operating costs, including electricity. Using MINE-MATCH data and historical ASIC market trends, the research reveals that the cost of acquiring the required ASICs could rise to $20 billion. Nuzzi further explained: “But these ASICs are not for sale!…In one scenario, that cost alone is close to $20 billion.”
Additionally, the study explored the hypothetical scenario of a nation-state manufacturing ASICs for an attack. He concluded that “the only model that could plausibly be reverse engineered is the S9, with a manufacturing cost of over $20 billion.” This highlights not only the financial but also the technical obstacles to mounting such an attack.
How much does a 51% attack on ethereum cost?
Turning its attention to ethereum, the study estimates an attack cost of more than $34 billion. This figure represents the need to manage more than 200 nodes and spend $1 million on Amazon Web Services (AWS) alone, showing the complex logistics involved in an attack on ethereum.
The study states: “Contrary to popular belief, an attacker would not be able to leverage LSDs to purchase access to block templates… We estimate that an attack on ethereum would take 6 months due to the abandonment limit that prevents staking from being fully deployed. at once”.
Nuzzi's research also critically evaluates the potential benefits of attacking bitcoin or ethereum, considering various strategies such as double spending and MEV exploits. He concludes that “most importantly, we found no ways in which the attacker could benefit from attacking bitcoin or ethereum,” underscoring the economic disincentives for such attacks.
Perhaps the most surprising finding is the empirical evidence supporting the existence of a Nash equilibrium in the security dynamics of bitcoin and ethereum. Nuzzi posits: “This is the first empirical evidence of Nash equilibrium in bitcoin and ethereum, where adversarial actions become unattractive compared to other strategies.”
In essence, the study not only quantifies the monumental costs associated with potential 51% attacks on bitcoin and ethereum, but also reaffirms the robustness of their security mechanisms. By providing a comprehensive economic analysis, it dispels many uncertainties surrounding blockchain security, contributing to a deeper understanding of the resilience and robustness of these networks against potential threats.
At the time of publication, btc was trading at $52,068.
Featured image created with DALL·E, chart from TradingView.com
