Altcoins Talks - Cryptocurrency Forum
Crypto Discussion Forum => Cryptocurrency discussions => Topic started by: mjdamgaard on July 25, 2024, 11:47:37 AM
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I wish to discuss the following topic, as it seems to be a major security risk for Bitcoin.
If Ethereum mounted a successful 51% attack on Bitcoin, it would likely crash the value of Bitcoin, making Ethereum the new number one cryptocurrency.
The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
In my preprint (M. J. Damgaard, A severe Goldfinger attack vector on Proof-of-Work blockchains, ResearchGate), I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
What are your thoughts in this forum? Is it safe to invest in Bitcoin before this attack vector has been mitigated? And do you think that it will force Bitcoin to convert to a Proof-of-Stake blockchain as well?
Edit:
Link to my preprint: https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains
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If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
How exactly they could make profit from performing 51% attack on Bitcoin?
In my preprint (M. J. Damgaard, A severe Goldfinger attack vector on Proof-of-Work blockchains, ResearchGate), I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
Do you mean this https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains (https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains)? It only mention word "profit" once on reference section, so i'm not sure i found correct link.
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I wish to discuss the following topic, as it seems to be a major security risk for Bitcoin.
If Ethereum mounted a successful 51% attack on Bitcoin, it would likely crash the value of Bitcoin, making Ethereum the new number one cryptocurrency.
The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
In my preprint (M. J. Damgaard, A severe Goldfinger attack vector on Proof-of-Work blockchains, ResearchGate), I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
What are your thoughts in this forum? Is it safe to invest in Bitcoin before this attack vector has been mitigated? And do you think that it will force Bitcoin to convert to a Proof-of-Stake blockchain as well?
Honestly speaking, I don't see etheruem attacking Bitcoin in any way. Bitcoin is the king of crypto and it drive entire crypto market since it's inception. Etheruem can't even control the altcoins market, it is just the second largest. .
crypto token with good volume, and has been few times being overtaken by XRP by trading volume.
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Bitcoin is using PoW while ethereum is using PoS. How is this connected to ethereum can afford a 51% attack on bitcoin?
Anything or anyone that wants to attack bitcoin blockchain will fail with how secure bitcoin blockchain is with the hash rates that bitcoin miners are generating.
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How exactly they could make profit from performing 51% attack on Bitcoin?
He believes they can profit by this:
The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
This means that they will pay the cost of the 51% attack, which is estimated between 6 to 20 billion dollars, but they will profit the market through the fall of Bitcoin and their takeover of the market, and thus their profit will be much greater than the cost of the 51% attack, which constitutes only 0.5% - 1.5% of the potential profits, according to his point of view. .
But I think he is wrong because if we assume the success of the alleged 51% attack, this will not lead to the fall of Bitcoin or the loss of its market dominance. This is not logical at all.
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How exactly they could make profit from performing 51% attack on Bitcoin?
It's about the difference in PoW and PoS
They could launch an attack and then an smear campaign, look how centralized it has become, it consumes energy, it's old it's not bla bla bla, everything.
If the king falls they are next in line, they could make it sound like a Nokia vs Samsung thing, if they are smart enough.
The cost of a 51% attack has been estimated to be $6–$20 billion.
As a miner, I'm curious about the numbers that lead to this.
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How exactly they could make profit from performing 51% attack on Bitcoin?
The statement that they will profit is based on the following arguments:
- If Bitcoin is 51%-attacked, it would presumably destroy the value of Bitcoin.
- However, since Ethereum is not as vulnerable to a Goldfinger attack, its value might not be affected negatively itself.
- In fact, if Bitcoin crashes and Ethereum becomes the new number one cryptocurrency on the market, presumably this could make Ethereum grow by a lot more than a few percent. This last argument is based on an assumption that cryptocurrency is a commodity, and that eliminating Ethereum's competitors would thus make its value grow.
Feel free to disagree with me on any of these points, as they could all benefit from further discussion.
Do you mean this https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains (https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains)? It only mention word "profit" once on reference section, so i'm not sure i found correct link.
Yes, that is it exactly.
I don't mention 'profit' explicitly, no. But I do hypothesize that the profit could be $375 billion. This number is based on the hypothetical event that Ethereum becomes as popular on the market as Bitcoin, while the total demand for cryptocurrency remains constant.
And if it completely conquers Bitcoin's share of the market (under the same assumptions), then that would be a growth of ~1.3 trillion.
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Bitcoin is using PoW while ethereum is using PoS. How is this connected to ethereum can afford a 51% attack on bitcoin?
In a 51% attack against a PoS blockchain, the attackers need to acquire a large portion of the cryptocurrency themselves, which means that they cannot really gain from it (except in wild hypothetical cases).
In a PoW blockchain, on the other hand, they only need to acquire more then 50% of the mining equipment (or bribe more than 50% of the existing miners). This is much more affordable, only measured in billions of dollars, see e.g. (L. Nuzzi, K. Waters, and M. Andrade, Breaking BFT: Quantifying the Cost to Attack Bitcoin and Ethereum, SSRN), whereas Bitcoin's total market cap is currently 1.3 trillion dollars.
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The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
You cannot make a 51% attack on bitcoi with just money or ETH.
To make a 51% attack on bitcoin, you need to buy Hardware, move it a location with cheap energy and then spend billions of dollars transforming that energy into hashing power. You need energy and hardware available.
On the other hand, with just a few billions you can buy ETH and control ETH network as it uses POS and nobody can stop you from simply buying some ETH and staking it.
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But I think he is wrong because if we assume the success of the alleged 51% attack, this will not lead to the fall of Bitcoin or the loss of its market dominance. This is not logical at all.
This is an interesting point that I would gladly discuss: Will Bitcoin's value really crash as a consequence of a 51% attack?
When the potential profits of a 51% attack is discussed in literature, it is typically assumed that attackers need to find a way to quickly convert the stolen bitcoin to commodities outside of the blockchain, e.g. dollars. (This is known as a replay attack, by the way.)
The reason is that if they simply stole a lot of bitcoin but didn't find a way to trade them for other commodities, then the value of Bitcoin would simply crash right afterwards, and they wouldn't turn a profit for all their hard work.
However, if one assumes that the value of Bitcoin would not crash as a consequence, then not only would the attackers be free from having to figure out how to trade the bitcoins for something else, they could also come back for seconds afterwards!
Once the attackers have gained more than 50% of the hash rate, they could thus, under that assumption, keep making replay attacks (as well as other malicious things like blackmailing) indefinitely.
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You cannot make a 51% attack on bitcoi with just money or ETH.
On the other hand, with just a few billions you can buy ETH and control ETH network as it uses POS and nobody can stop you from simply buying some ETH and staking it.
Bitmain sells the cheapest gear for $10, let's ignore the used gear that is on sale for $5, and go for $20, you will need about 12 billions for that.
12 billions assuming the price will keep stable will only give you less than 3% of the ETH coins.
Besides, you won't even need 600 exhash, it will be enough to put 300 online a lot of miners will crumble as the income goes 2/3 and you will have less to compete with.
Yup, you only need money, because money can buy you everything.
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The cost of a 51% attack has been estimated to be $6–$20 billion.
As a miner, I'm curious about the numbers that lead to this.
Thanks for reminding me. My source for those numbers is (L. Nuzzi, K. Waters, and M. Andrade, Breaking BFT: Quantifying the Cost to Attack Bitcoin and Ethereum, SSRN).
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Bitmain sells the cheapest gear for $10, let's ignore the used gear that is on sale for $5, and go for $20, you will need about 12 billions for that.
This is not a money issue.
Go to amazon and select the Bitmain gear you want.
Now click quantity and choose 1 million. Then choose free shipping. Do you think it will work? ;D
Where the hell will you store all that shit? Who will ship it for you? Things are not so simple.
Yup, you only need money, because money can buy you everything.
I doubt it in this case...
You would need to basically buy many mining companies, it would be more realistic.
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Bitmain sells the cheapest gear for $10, let's ignore the used gear that is on sale for $5, and go for $20, you will need about 12 billions for that.
This is not a money issue.
Go to amazon and select the Bitmain gear you want.
Now click quantity and choose 1 million. Then choose free shipping. Do you think it will work? ;D
Where the hell will you store all that shit? Who will ship it for you? Things are not so simple.
Yup, you only need money, because money can buy you everything.
I doubt it in this case...
You would need to basically buy many mining companies, it would be more realistic.
If Ethereum stakeholders pool their resources, they could still buy that mining equipment over time, couldn't they?
And they could also bribe existing miners, alternatively. Bitcoin miners are currently bought by the promise of bitcoin mining rewards. There's nothing in principle stopping Ethereum stakeholders from outbidding that promise, is there?
Of course, Bitcoin stakeholders could then try to bid even more than that as a defense strategy. But this would just open a world of trouble, as miners would then be highly incentivized to play both roles and pretend bribe themselves (anonymously) in order to force Bitcoin stakeholders to give out greater rewards. So I don't think that defense strategy could work at all. But I digress.
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I wish to discuss the following topic, as it seems to be a major security risk for Bitcoin.
If Ethereum mounted a successful 51% attack on Bitcoin, it would likely crash the value of Bitcoin, making Ethereum the new number one cryptocurrency.
The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
In my preprint (M. J. Damgaard, A severe Goldfinger attack vector on Proof-of-Work blockchains, ResearchGate), I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
What are your thoughts in this forum? Is it safe to invest in Bitcoin before this attack vector has been mitigated? And do you think that it will force Bitcoin to convert to a Proof-of-Stake blockchain as well?
Well, to be honest with you, I do not fully understand what you are insinuating, but what I have to say is that; even if it's possible for ethereum to perform a 51% attack on bitcoin, it is totally impossible for them to carry such attack cus there is exactly no benefit of doing so. Think about this for a moment, what is bitcoin currently benefiting as the number one cryptocurrency according to the market cap? The answer is nothing, and what will ethereum benefit it successfully flip bitcoin to become the number one cryptocurrency; even after spending billions of dollars to bring bitcoin down? The answer is nothing as well. There is absolutely no benefit if ethereum performs a 51% attack on bitcoin just to take the number one position in terms of market cap, so there is absolutely no need discussing this topic if you ask me.
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Bitcoin crash does not mean the flow of money to Ethereum as it is the number one cryptocurrency or trust in PoS, but rather it may lead to a loss of trust in cryptocurrencies and the search for another investment.
If Bitcoin is severely affected, Ethereum will certainly be severely affected.
The chances of a 51% success of an attack are expensive, but it will only affect the price. Everyone will stop broadcasting transactions and wait until the network is safe, and whoever creates the attack will not be able to continue it for a long time.
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Well, to be honest with you, I do not fully understand what you are insinuating, but what I have to say is that; even if it's possible for ethereum to perform a 51% attack on bitcoin, it is totally impossible for them to carry such attack cus there is exactly no benefit of doing so. Think about this for a moment, what is bitcoin currently benefiting as the number one cryptocurrency according to the market cap? The answer is nothing, and what will ethereum benefit it successfully flip bitcoin to become the number one cryptocurrency; even after spending billions of dollars to bring bitcoin down? The answer is nothing as well. There is absolutely no benefit if ethereum performs a 51% attack on bitcoin just to take the number one position in terms of market cap, so there is absolutely no need discussing this topic if you ask me.
Well, as mentioned in an earlier reply, the argument that Ethereum will grow in value as a consequence of Bitcoin's crash is based on an assumption that cryptocurrency is a commodity, and that people want to buy and use cryptocurrency due to its benefits.
Thus, if Ethereum knocks Bitcoin off its number one spot, and the total demand for cryptocurrency as a commodity remains constant, Ethereum would grow in value, namely as the consequence of eliminating its primary competitor on the market.
What is your opinion on this assumption, by the way, i.e. that the total demand for crypto as a commodity would remain constant?
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Bitcoin crash does not mean the flow of money to Ethereum as it is the number one cryptocurrency or trust in PoS, but rather it may lead to a loss of trust in cryptocurrencies and the search for another investment.
If Bitcoin is severely affected, Ethereum will certainly be severely affected.
The chances of a 51% success of an attack are expensive, but it will only affect the price. Everyone will stop broadcasting transactions and wait until the network is safe, and whoever creates the attack will not be able to continue it for a long time.
I guess this would depend on whether the Ethereum community manages to successfully communicate to the world that PoS would be safe from a similar kind of attack.
If they manage to do so, then the value of Ethereum might not be negatively affected. (And it would then only be positively affected, i.e. by investors migrating from Bitcoin to Ethereum.)
Edit:
User Stompix also has a really great point here:
It's about the difference in PoW and PoS
They could launch an attack and then an smear campaign, look how centralized it has become, it consumes energy, it's old it's not bla bla bla, everything.
If the king falls they are next in line, they could make it sound like a Nokia vs Samsung thing, if they are smart enough.
They could in principle make it into a whole 'Ethereum vs Bitcoin' campaign, and try to communicate that narrative.
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I wish to discuss the following topic, as it seems to be a major security risk for Bitcoin.
If Ethereum mounted a successful 51% attack on Bitcoin, it would likely crash the value of Bitcoin, making Ethereum the new number one cryptocurrency.
The cost of a 51% attack has been estimated to be $6–$20 billion. This is only 1.3%–4.4% of Ethereum's current market cap. And it is only 0.5%–1.5% of its potential growth if Ethereum knocks down Bitcoin and conquers its full share of the cryptocurrency market.
If the Ethereum stakeholders pool their resources, they could thus easily afford a 51% attack (also known as a Goldfinger attack in this case) against Bitcoin, and could profit quite considerably from it.
In my preprint (M. J. Damgaard, A severe Goldfinger attack vector on Proof-of-Work blockchains, ResearchGate), I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
What are your thoughts in this forum? Is it safe to invest in Bitcoin before this attack vector has been mitigated? And do you think that it will force Bitcoin to convert to a Proof-of-Stake blockchain as well?
Honestly speaking, I don't see etheruem attacking Bitcoin in any way. Bitcoin is the king of crypto and it drive entire crypto market since it's inception. Etheruem can't even control the altcoins market, it is just the second largest. .
crypto token with good volume, and has been few times being overtaken by XRP by trading volume.
- Is Ethereum attacking Bitcoin? well, that's not possible to happen, then if I am a long-term holder I would rather save Ethereum than Bitcoin because there are higher chances that more than 5x can be earned here at ETH.
Then I also think that when in ETH I am a Bitcoin and other cryptocurrencies are really high chances that we get profit
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But I think he is wrong because if we assume the success of the alleged 51% attack, this will not lead to the fall of Bitcoin or the loss of its market dominance. This is not logical at all.
This is an interesting point that I would gladly discuss: Will Bitcoin's value really crash as a consequence of a 51% attack?
When the potential profits of a 51% attack is discussed in literature, it is typically assumed that attackers need to find a way to quickly convert the stolen bitcoin to commodities outside of the blockchain, e.g. dollars. (This is known as a replay attack, by the way.)
The reason is that if they simply stole a lot of bitcoin but didn't find a way to trade them for other commodities, then the value of Bitcoin would simply crash right afterwards, and they wouldn't turn a profit for all their hard work.
However, if one assumes that the value of Bitcoin would not crash as a consequence, then not only would the attackers be free from having to figure out how to trade the bitcoins for something else, they could also come back for seconds afterwards!
Once the attackers have gained more than 50% of the hash rate, they could thus, under that assumption, keep making replay attacks (as well as other malicious things like blackmailing) indefinitely.
Unfortunately, this is true. The biggest obstacle for anyone who wants to carry out a 51% attack is the cost or economic feasibility. Therefore, if this malicious party has the necessary money and its goal is to sabotage the Bitcoin network only without obtaining any economic benefits, then I can say, unfortunately, that they will succeed in controlling the blockchain and they will not care if the network collapses and Bitcoin loses its value.
On the other hand, I do not know the position of the Bitcoin community in this case and do they have countermeasures to contain such a dangerous situation?
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What are your thoughts in this forum? Is it safe to invest in Bitcoin before this attack vector has been mitigated? And do you think that it will force Bitcoin to convert to a Proof-of-Stake blockchain as well?
Yes, it is very much safe and profitable as well to be investing with Bitcoin...and even with Ethereum also...and all because Ethereum will not be attacking the King of all Cryptos. In case, it is really possible to do such a thing, it would be counterproductive all because where Bitcoin go so does the whole cryptocurrency industry including Ethereum. Bitcoin is the captain of this industry and killing it would turn the whole boat upside down. No, there is no chance for now for Bitcoin to transform into Proof-of-Stake blockchain as it can be more vulnerable to attacks.
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On the other hand, I do not know the position of the Bitcoin community in this case and do they have countermeasures to contain such a dangerous situation?
I don't know it either. I know that in the past, there has been a hard fork due to an update, which was subsequently resolved with a soft fork. But that type of action requires cooperation by more than 50% of the miners, something that Bitcoin couldn't depend on under a 51% attack.
The Bitcoin community could try to vote to go back to the original fork after a 51% attack, and declare the attack fork, as we might call it, invalid. And they could choose to distribute the rights to vote according PoS if they are smart.
However, if this is only implemented as a fail safe solution, the attacking miners, with the backing of Ethereum, could keep making reorgs just at the edge of what the community considers normal or malicious activity, thus causing disagreement of whether forks are valid or not.
The only long-lasting solution (that remains decentralized), as far as I can see, would therefore be to fully convert to PoS for the everyday consensus mechanism. But then Bitcoin better make sure that the community is on board with PoS, or else it will create a fork of the blockchain.
Edit:
Let me also just add: Whatever Bitcoin decides to do, they better make a concise and timely decision about it, I think. 'Cause if investors first start to become uneasy and trade their BTC to ETH as a result, it would make the value of Bitcoin drop, which would then make it even easier to afford a 51% attack. As far as I can see, this could create a feedback loop where more and more investors migrate from Bitcoin to Ethereum—where the first ones to do so might gain a lot from it, but where the last ones left behind will have lost a lot of money.
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Until now there has been no news that ethereum is attacking bitcoin so that in the future ethereum can beat the price of bitcoin, that is a small possibility or even impossible. When it comes to Bitcoin technology, it still sticks with the old technology because many people still use it... Investing in Bitcoin is still safe and smooth, depending on how each individual manages it, if that person has a strategy and has enough information, it's likely he will make a profit...
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- In fact, if Bitcoin crashes and Ethereum becomes the new number one cryptocurrency on the market, presumably this could make Ethereum grow by a lot more than a few percent. This last argument is based on an assumption that cryptocurrency is a commodity, and that eliminating Ethereum's competitors would thus make its value grow.
I somewhat disagree with this part. There's possibility people would lose trust to cryptocurrency in general. And since i expect only small fraction of ETH owner would collaborate to perform such attack, they need ETH price grow a lot to actually make profit.
Do you mean this [...]? It only mention word "profit" once on reference section, so i'm not sure i found correct link.
Yes, that is it exactly.
--snip--
Thanks for the confirmation.
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Yes, it is very much safe and profitable as well to be investing with Bitcoin...and even with Ethereum also...and all because Ethereum will not be attacking the King of all Cryptos. In case, it is really possible to do such a thing, it would be counterproductive all because where Bitcoin go so does the whole cryptocurrency industry including Ethereum. Bitcoin is the captain of this industry and killing it would turn the whole boat upside down. No, there is no chance for now for Bitcoin to transform into Proof-of-Stake blockchain as it can be more vulnerable to attacks.
- In fact, if Bitcoin crashes and Ethereum becomes the new number one cryptocurrency on the market, presumably this could make Ethereum grow by a lot more than a few percent. This last argument is based on an assumption that cryptocurrency is a commodity, and that eliminating Ethereum's competitors would thus make its value grow.
I somewhat disagree with this part. There's possibility people would lose trust to cryptocurrency in general. [...]
I think these are reasonable opinions, especially given that the price of Ethereum in the past seems to have followed the price of Bitcoin to some extent.
However, this correlation in price could potentially end if the Ethereum community manages to successfully communicate the differences to the world, as mentioned in this earlier reply:
Bitcoin crash does not mean the flow of money to Ethereum as it is the number one cryptocurrency or trust in PoS, but rather it may lead to a loss of trust in cryptocurrencies and the search for another investment.
If Bitcoin is severely affected, Ethereum will certainly be severely affected.
The chances of a 51% success of an attack are expensive, but it will only affect the price. Everyone will stop broadcasting transactions and wait until the network is safe, and whoever creates the attack will not be able to continue it for a long time.
I guess this would depend on whether the Ethereum community manages to successfully communicate to the world that PoS would be safe from a similar kind of attack.
If they manage to do so, then the value of Ethereum might not be negatively affected. (And it would then only be positively affected, i.e. by investors migrating from Bitcoin to Ethereum.)
Edit:
User Stompix also has a really great point here:
It's about the difference in PoW and PoS
They could launch an attack and then an smear campaign, look how centralized it has become, it consumes energy, it's old it's not bla bla bla, everything.
If the king falls they are next in line, they could make it sound like a Nokia vs Samsung thing, if they are smart enough.
They could in principle make it into a whole 'Ethereum vs Bitcoin' campaign, and try to communicate that narrative.
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I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
Which is more effective, bribing existing miners or building your own large mining farm that dominates the hash power worldwide?
I also found a good read about the 51% attack on ethereum which might give bitcoin miners a reason to consider whether they are worth accepting ethereum as bribe money.
https://web.archive.org/web/20230529004335/https://vitalik.ca/general/2023/05/21/dont_overload.html
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[...] And since i expect only small fraction of ETH owner would collaborate to perform such attack, they need ETH price grow a lot to actually make profit.
This is a good point. Especially if we assume that the Ethereum stakeholders need to pay the miners for their ASICs as well as the operational costs, which makes sense 'cause if Bitcoin falls, it is likely that those ASICs would be hard to sell.
Nonetheless, it still seems that Ethereum might be able to afford a 51% attack even if only some portion of its stakeholders participate in funding it.
If we for instance suppose that the total demand for cryptocurrency will be unchanged after the attack, and assume that an attack would cost around $12B, then even if Ethereum only grows to become as popular as Bitcoin, which by my calculations would mean a growth of roughly $400B, it would then only take... let me do some quick math: $400B × x > $12B <=> x > $12B / $400B = 3%... It would only take a fraction of 3% before breaking even in terms of costs and gains. (And anything above that would mean a profit.)
If we suppose that Bitcoin is completely destroyed, however, and that Ethereum would grow by $1.3T, then the fraction only needs to be above $12B / $1,300B = 0.9% before they start making a profit from it.
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I also discuss how the Ethereum stakeholders can bribe existing Bitcoin miners through smart contracts to make the attack even more feasible.
Which is more effective, bribing existing miners or building your own large mining farm that dominates the hash power worldwide?
I also found a good read about the 51% attack on ethereum which might give bitcoin miners a reason to consider whether they are worth accepting ethereum as bribe money.
https://web.archive.org/web/20230529004335/https://vitalik.ca/general/2023/05/21/dont_overload.html
I'm not exactly an expert, but I'd say that bribing would likely be the most efficient strategy for two reasons:
- It means that you only need to acquire +50% of the preexisting hash rate in order to gain a majority, rather than +100% of it.
- It would save some logistical costs as well in terms of where to build that farm, etc., instead of just buying into existing infrastructure.
About the read, that is a good one, about not reusing the same consensus mechanism for too many applications outside of the core protocol. Thanks for sharing that.
In terms of the possibility of a 51% attack on Ethereum, I think that (S. Lee and S. Kim, Short Selling Attack: A Self-Destructive But Profitable 51% Attack On PoS Blockchains, https://eprint.iacr.org/2020/019) is also worth a read, even though I believe that Ethereum could quite easily guard against such an attack, as also mentioned in my own preprint.
Edit:
Oh, and there is also the third point: 3. that bribing miners could be done anonymously via smart contracts.
2nd Edit:
Of course, if it turns out that more than 50% of the existing miners are die-hard loyal to their blockchain, then it would also require recruiting at least some new miners.
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In terms of the possibility of a 51% attack on Ethereum, I think that (S. Lee and S. Kim, Short Selling Attack: A Self-Destructive But Profitable 51% Attack On PoS Blockchains, https://eprint.iacr.org/2020/019) is also worth a read, even though I believe that Ethereum could quite easily guard against such an attack, as also mentioned in my own preprint.
To succeed in such an attack, you need about 40 million S9 units and a huge amount of electrical power in addition to the space. The chance of this attack continuing is not related to the amount of money you spend to make the attack successful, but to keep all these devices safe. Do you expect that companies or individuals will not move against you to stop providing you with electricity or attack these facilities? While in Ethereum, implementing a 51% attack is much easier, as you need money to implement a successful attack.
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Go to amazon
Nobody even with millions not billions in his pocket buys from Amazon.
Bitmain usually has MOQ of 100 on new gear and they easily sell them in the thousands, as you don't need to order and have them all shipped in the same day, you can easily build that hahsrate with enough money while letting others miners feel the pinch and abandoning their gear, used gear is already selling at $5 per th/s and there are tens of exa waiting to be picked by somebody.
You would need to basically buy many mining companies, it would be more realistic.
Yeah, but just as those companies got their gear you can get yours, right?
It's still a matter of money.
The chances of a 51% success of an attack are expensive, but it will only affect the price. Everyone will stop broadcasting transactions and wait until the network is safe, and whoever creates the attack will not be able to continue it for a long time.
Once somebody has 51% of the hahsrate he can make the attack continuously, there is no stopping them, the first day the honest miners mine 150 blocks, the attacker 160, he broadcasts his chain, his chain has more work, and he invalidates the legit one, the honest miners don't get a dime all tx are invalidated, he does the same the next day, most honest miners will pull the plug as the price goes down, they don't get a single block, it just makes the attack cheaper and easier to do. If the honest hahsrate drops to half it also means that even after running for 7 days and shutting down the attacker will still have a 6 days advance at least on the chain, so he can broadcast his for another week.
Also don't forget the attacker is also getting his bitcoin rewards, so he is getting a bit while running this, just as honest miners.
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To succeed in such an attack, you need about 40 million S9 units and a huge amount of electrical power in addition to the space. The chance of this attack continuing is not related to the amount of money you spend to make the attack successful, but to keep all these devices safe. Do you expect that companies or individuals will not move against you to stop providing you with electricity or attack these facilities? While in Ethereum, implementing a 51% attack is much easier, as you need money to implement a successful attack.
Well, in terms of the logistics of it all, the 51% attack could be made easier by bribing existing miners (potentially via smart contracts on Ethereum), as also mentioned in my preprint, https://www.researchgate.net/publication/382247908_A_severe_Goldfinger_attack_vector_on_Proof-of-Work_blockchains.
You bring up a good question of whether attacks would face resistance from companies or individuals (and one might also add: persecution from governments). I couldn't say for sure.
But in my personal view, I find it equally likely that the Ethereum stakeholders could persuade companies, governments, and individuals to be on their side, due to the massive electricity consumption that might be freed for other use—or saved, leading to less CO2 emission—as a consequence of bringing down Bitcoin.
However, since Ethereum stakeholders can bribe Bitcoin miners anonymously, this issue might not even be relevant in the end.
Edit:
Oh, and about the ASIC companies in particular: Well, how would they know the intentions of their costumers? (And what could they really do about it?)
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@mjdamgaard, Vitalik is that you? ::)
No matter what kind of attack you are talking about, the people around ETH are not going to join a criminal association to try something that would do them more harm than good. All those stories about how ETH will one day "overthrow" BTC in one way or another are just fairy tales for small children, because the trust that BTC has is hard for any other cryptocurrency to ever gain, especially if they ever think of going in the direction you are talking about.
One team that tried to take down BTC with their fork ended up very ingloriously, I have no doubt that the same fate would await others.
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@mjdamgaard, Vitalik is that you? ::)
No matter what kind of attack you are talking about, the people around ETH are not going to join a criminal association to try something that would do them more harm than good. All those stories about how ETH will one day "overthrow" BTC in one way or another are just fairy tales for small children, because the trust that BTC has is hard for any other cryptocurrency to ever gain, especially if they ever think of going in the direction you are talking about.
One team that tried to take down BTC with their fork ended up very ingloriously, I have no doubt that the same fate would await others.
He, I wish. Well, according to your own argument, Vitalik would not engage in this discussion. ;)
Interesting. To which fork are you referring here? Can you provide a link/reference?
I will say 'joining a criminal association' is certainly one way of phrasing it. But I believe that the Ethereum stakeholders might be able to communicate a different narrative. They might put it instead as 'exposing PoW as a no longer viable technology' and also perhaps as 'relieving the world of a wasteful an unnecessary electricity consumption.'
As mentioned in my preprint, they also don't necessarily have to make a directly harmful attack on Bitcoin in order to still be able to showcase the vulnerability.
And perhaps they would indeed only need to showcase this power in order to make some investors migrate from Bitcoin to Ethereum. Once this migration has started, it could then create a positive feedback loop, as hypothesized in an earlier reply, causing more and more investors to follow suit.
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To succeed in such an attack, you need about 40 million S9 units and a huge amount of electrical power in addition to the space.
Where did you get that?
Nobody would be attacking with S9, even fi we talk S19, either pro or K or xp you would need around 4 to 6 millions of them.
If we talk S21Hydros X it could be done with 1.25 million.
Do you expect that companies or individuals will not move against you to stop providing you with electricity or attack these facilities?
Why and how?
How can you stop me legally from mining empty blocks on a decentralized permissionless blockchain owned by nobody?
One team that tried to take down BTC with their fork ended up very ingloriously, I have no doubt that the same fate would await others.
They never tried to do it via hashrate attack because it would have harmed them too, but if they did try at that point the BCH team would have won, they controlled more than half of the hashrate, but in the end money talked and miners went for the bigger profits, if bitmain/via/btccom/f2/antpool would have gone in suicidal scorched earth at that time it would have been the end of both.
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You would need to basically buy many mining companies, it would be more realistic.
Yeah, but just as those companies got their gear you can get yours, right?
It's still a matter of money.
But they didn't buy gear to have enough hashrate to make a 51% attack. I doubt any mining company would have more than 3-5% (maybe 10? I really doubt it)....
It would be interesting to see charts like that, we usually only see charts of pools, not companies/miners hashrate. Although I think it is very hard to make a realistic hash rate chart, as this data is not easily available.
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It would be interesting to see charts like that, we usually only see charts of pools, not companies/miners hashrate. Although I think it is very hard to make a realistic hash rate chart, as this data is not easily available.
Once you start digging for the US it becomes pretty simple.
First, we must ignore the fact that one company holds just 10Exahash for example, that's how much they afford to buy, if you have billions flowing in you could buy as many as ten companies like that and expand as you wish.
We know Foundy is a closed pool, you need at least 100Ph/s to be able to mine there, and it's US-based, so companies in the US and small miners there have somewhere in the 150-200 Exas at their disposal, if those companies managed to acquire that much hashrate in 2-3 years, why would it be impossible for other to do so as long as they have the money.
Now if someone wants to do real deep research on it, it can start from the SEC fillings for riot, mara, hut8, and many more, most of them are publicly traded companies, so their costs as well as investments and debts and losses/profits are all public.
I would just say that
- you have 20 billion to spend, yes you could launch an attack, and make it successful
- you have 20 billion, maybe there are way smarter ways of making 40 billion with less hassle
- we talk just $ at this point acquiring 51% of the hash rate is cheaper than acquiring 51% of all ETH coins
but!!
- you don't need to buy 51% of all ETH coins to do that, see LIDO
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No matter what kind of attack you are talking about, the people around ETH are not going to join a criminal association to try something that would do them more harm than good. All those stories about how ETH will one day "overthrow" BTC in one way or another are just fairy tales for small children, because the trust that BTC has is hard for any other cryptocurrency to ever gain, especially if they ever think of going in the direction you are talking about.
It is also worth pointing out that the attackers don't need to have the prominent members of the community on board for the attack. As discussed in an earlier reply, they only need a fraction of the Ethereum stakeholders to take part in order to turn a profit (given the aforementioned assumption that the total demand for crypto won't suffer greatly, at least when enough time has passed).
Even with something like 20% taking part, they could still make their assets grow potentially by more than 100%. By the way, the remaining Ethereum stakeholders who "keep their hands clean" of the attack will also have their assets grow as a result, only by slightly more (as they don't carry any of the costs).
And given that the attackers can be completely anonymous if they bribe the miners via smart contracts, as described in my preprint, it is not that hard to imagine that 20% or more of the stakeholders would be willing to shake things up and earn a lot of money.
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if you are just talking about the having the capacity to pay and get all the necessary stuff to do the 51% attack, then it can. So the majority of the biggest companies could also do that because they can afford it, Would they do that as well? I don’t know maybe when there is something that does it. I hope we don’t see it though.
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if you are just talking about the having the capacity to pay and get all the necessary stuff to do the 51% attack, then it can. So the majority of the biggest companies could also do that because they can afford it, Would they do that as well? I don’t know maybe when there is something that does it. I hope we don’t see it though.
Well, if the Bitcoin community is cohesive and fast enough to react, they should be able to mitigate it. At least, I think so..
As far as I can see, there is nothing stopping Bitcoin from following in the footsteps of Ethereum. Until 2022, Ethereum also used a PoW protocol, then they switched to PoS. Why wouldn't Bitcoin be able to do the same?
Hopefully they will be quick enough to act before investors get uneasy and start migrating to Ethereum. And hopefully the community will be sufficiently on the same page about the conversion, as to not cause a hard fork.
Edit:
Granted, Ethereum's switch to PoS had been a long time coming, but still... Bitcoin could in principle do just the same.
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He, I wish. Well, according to your own argument, Vitalik would not engage in this discussion. ;)
Of course he wouldn't stoop to such a low level to communicate with us, because from everything I know about him he has a very high opinion of himself and his project which (unfortunately for him) has never and will never reach Bitcoin in anything.
Interesting. To which fork are you referring here? Can you provide a link/reference?
@Stompix already mentioned in his post that it is a BCH fork, but their attempt failed regardless of everything they invested to convince people that their coin is real Bitcoin.
I will say 'joining a criminal association' is certainly one way of phrasing it. But I believe that the Ethereum stakeholders might be able to communicate a different narrative. They might put it instead as 'exposing PoW as a no longer viable technology' and also perhaps as 'relieving the world of a wasteful an unnecessary electricity consumption.'
They can communicate in any way they want, but if the motive is malicious, then nothing matters. The fact that ETH left POW means nothing more than the weakness of those behind the project, and in the long term they have done themselves great harm because that token will be nothing more than another in a series of centralized altcoins.
Myths about how BTC mining consumes huge amounts of energy (relative to who or what?) have long since been dispelled - because it was undoubtedly established that it used to be 0.2% of total electricity, of which more than 50% came from renewable sources.
In addition, if you were to assume that BTC mining consumes around 200 TWh per year (probably less than that), and that the losses in the global electrical network are as much as 50 000 TWh per year, then you can see how stupid it is to go in that direction at all.
As mentioned in my preprint, they also don't necessarily have to make a directly harmful attack on Bitcoin in order to still be able to showcase the vulnerability.
And perhaps they would indeed only need to showcase this power in order to make some investors migrate from Bitcoin to Ethereum. Once this migration has started, it could then create a positive feedback loop, as hypothesized in an earlier reply, causing more and more investors to follow suit.
I can publicly say that I would not be among those who would switch to ETH for any reason, and I see no reason for most investors to do the same. People will always look for ways to profit from cryptocurrencies, but the idea that ETH will dethrone BTC is 10 years old and has never come close to being realized.
The only reason why ETH is in second position is that it has x6 circulating supply in relation to BTC, and there is still no clearly defined max supply.
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Look, after Bitcoin, if anyone has been seen in the market, then it is Ethereum. But as I said, after Bitcoin, the primary one is Bitcoin. I don't think there will be any impact on it.
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Look, after Bitcoin, if anyone has been seen in the market, then it is Ethereum. But as I said, after Bitcoin, the primary one is Bitcoin. I don't think there will be any impact on it.
The current price movement of Ethereum still depends on the price movement of Bitcoin. Although Ethereum has good news about being accepted by ETF Ethereum will not make the price of Ethereum increase significantly. A few days ago Ethereum also collapsed so this shows that Bitcoin is still dominant over several other altcoins including Ethereum.
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He, I wish. Well, according to your own argument, Vitalik would not engage in this discussion. ;)
Of course he wouldn't stoop to such a low level to communicate with us, because from everything I know about him he has a very high opinion of himself and his project which (unfortunately for him) has never and will never reach Bitcoin in anything.
Interesting. To which fork are you referring here? Can you provide a link/reference?
@Stompix already mentioned in his post that it is a BCH fork, but their attempt failed regardless of everything they invested to convince people that their coin is real Bitcoin.
I will say 'joining a criminal association' is certainly one way of phrasing it. But I believe that the Ethereum stakeholders might be able to communicate a different narrative. They might put it instead as 'exposing PoW as a no longer viable technology' and also perhaps as 'relieving the world of a wasteful an unnecessary electricity consumption.'
They can communicate in any way they want, but if the motive is malicious, then nothing matters. The fact that ETH left POW means nothing more than the weakness of those behind the project, and in the long term they have done themselves great harm because that token will be nothing more than another in a series of centralized altcoins.
Myths about how BTC mining consumes huge amounts of energy (relative to who or what?) have long since been dispelled - because it was undoubtedly established that it used to be 0.2% of total electricity, of which more than 50% came from renewable sources.
In addition, if you were to assume that BTC mining consumes around 200 TWh per year (probably less than that), and that the losses in the global electrical network are as much as 50 000 TWh per year, then you can see how stupid it is to go in that direction at all.
As mentioned in my preprint, they also don't necessarily have to make a directly harmful attack on Bitcoin in order to still be able to showcase the vulnerability.
And perhaps they would indeed only need to showcase this power in order to make some investors migrate from Bitcoin to Ethereum. Once this migration has started, it could then create a positive feedback loop, as hypothesized in an earlier reply, causing more and more investors to follow suit.
I can publicly say that I would not be among those who would switch to ETH for any reason, and I see no reason for most investors to do the same. People will always look for ways to profit from cryptocurrencies, but the idea that ETH will dethrone BTC is 10 years old and has never come close to being realized.
The only reason why ETH is in second position is that it has x6 circulating supply in relation to BTC, and there is still no clearly defined max supply.
I admire your conviction, and I honestly don't doubt that a large portion of the Bitcoin community will agree with you.
But I'm not entirely convinced that this conviction will matter much in case of an actual 51% attack. If Ethereum stakeholders indeed manage to fund a successful 51% attack on Bitcoin, surely the value of Bitcoin would be severely damaged by it, would it not?
Also, regarding the whole publicity aspect of it, I do think that with several hundred billion dollars on the line, Ethereum would be able to make a campaign and spin it the right way to get public support, if they really want that. And as far as I know, Bitcoin is at least as infamous as it is famous to a sizable part of the public, but that doesn't really stop it from trading well on the market.
But then again, since only a fraction of the stakeholders need to take part in funding the attack (and can do so anonymously), a majority of the Ethereum community could still be seen as innocent after the attack, even if the attack turns out to be disliked by the public.
Edit:
I should also say: You do make a good point about electricity coming in large part from renewable sources. However, if PoW is exposed as not delivering on the security that it promises anyway, i.e. in the presence of a rival PoS blockchain large enough to be able to afford an attack, then it's still just electricity (and money) down the bin, essentially.
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I admire your conviction, and I honestly don't doubt that a large portion of the Bitcoin community will agree with you.
But I'm not entirely convinced that this conviction will matter much in case of an actual 51% attack. If Ethereum stakeholders indeed manage to fund a successful 51% attack on Bitcoin, surely the value of Bitcoin would be severely damaged by it, would it not?
People would agree with me because they have a trust in Bitcoin that has been built long enough to make BTC what it is today. For some it's just a great investment asset, for others it's a perfect cryptocurrency, for others it's both.
Of course, the attack you are talking about is not something that should be completely rejected, but I personally think that the people you are talking about do not have the courage or too much motivation to do it. Such an attack is a double-edged sword, because if they fail, what would it mean that ETH?
Also, regarding the whole publicity aspect of it, I do think that with several hundred billion dollars on the line, Ethereum would be able to make a campaign and spin it the right way to get public support, if they really want that. And as far as I know, Bitcoin is at least as infamous as it is famous to a sizable part of the public, but that doesn't really stop it from trading well on the market.
I'll say it again, I think you overestimate their power and motive - do you think the devs headed by Vitalik would agree with their attack on BTC? It is true that over the years BTC has gained a bad name due to some mainstream media reporting poorly on some things such as ransomware or the possible financing of terrorism with BTC, but it is never the tool's fault but the people who use it inappropriately.
But then again, since only a fraction of the stakeholders need to take part in funding the attack (and can do so anonymously), a majority of the Ethereum community could still be seen as innocent after the attack, even if the attack turns out to be disliked by the public.
No one would be innocent because you can't escape the fact that it was done by people involved with ETH - the very fact that these people (regardless of who they are) have such malicious intentions would throw a big stain on the whole project.
Edit:
I should also say: You do make a good point about electricity coming in large part from renewable sources. However, if PoW is exposed as not delivering on the security that it promises anyway, i.e. in the presence of a rival PoS blockchain large enough to be able to afford an attack, then it's still just electricity (and money) down the bin, essentially.
The fact is that PoW has been working since 2009 for BTC, and it is only your assumption that PoS can be some kind of threat. For me personally, PoS is a step backwards for ETH, because someone wrote that the whole thing can be run by a character from his basement if he is powerful enough.
Bitcoin is much more than money, electricity and the fight for thrones, but maybe it will take another 10 or 15 years for everyone to understand that.
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Of course, the attack you are talking about is not something that should be completely rejected, but I personally think that the people you are talking about do not have the courage or too much motivation to do it. Such an attack is a double-edged sword, because if they fail, what would it mean that ETH?
Yeah, that is hard to guess at, I must admit. Maybe people are thinking too much about crypto as one thing, and are not thinking much about the competition between the different blockchains.
But I can't help but feel like that could quickly change, especially if the Ethereum community starts being just a little bit vocal about this potential security flaw in PoW, as well as focusing on the narrative of being more friendly to the environment (and more cost-effective for the investors/users who have to ultimately pay the electricity bill).
As an anecdote, when I have talked about working on an attack vector to friends and family, merely the mention of the fact that it could save an electricity consumption the size of Finland's or Belgium's, or whatever it is exactly, immediately makes them quite excited and positively interested in it. Obviously there's a bias here to take into account, but nonetheless I can't help but feel that a large part of the public would be quite positive towards a change from PoW to PoS, and quite frankly perhaps even enough to be in support of Ethereum making a power move on Bitcoin in order to force such a change.
And as the original inventors of the 'Goldfinger attack' (Kroll et al.) argues (referencing an earlier paper by Becker et al.), maybe there's even a chance, however slim, that the public could go as far as help funding the attack. Again, it might be a slim chance, but this is just to illustrate the point.
I'll say it again, I think you overestimate their power and motive - do you think the devs headed by Vitalik would agree with their attack on BTC? It is true that over the years BTC has gained a bad name due to some mainstream media reporting poorly on some things such as ransomware or the possible financing of terrorism with BTC, but it is never the tool's fault but the people who use it inappropriately.
But then again, since only a fraction of the stakeholders need to take part in funding the attack (and can do so anonymously), a majority of the Ethereum community could still be seen as innocent after the attack, even if the attack turns out to be disliked by the public.
No one would be innocent because you can't escape the fact that it was done by people involved with ETH - the very fact that these people (regardless of who they are) have such malicious intentions would throw a big stain on the whole project.
I honestly think you might be right about the fact that if we asked the devs and/or stakeholders right at this moment if they would be supportive of such an attack, their first answer would probably be no.
But on the other hand, I think that with the potential growth of their assets of around 100% or more looming on the horizon, that mentality is bound to slowly change over time, at least for a good portion of the stakeholders.
And because even the talk alone about this security flaw could already start making slightly more investors choose Ethereum over Bitcoin than before, which would already make the preexisting stakeholders' assets grow in that case, I think they are bound to start being more and more vocal about it at some point.
With so much money on the line, this contention will most likely reach the public sooner or later. And if the a big enough part of the public turns out to be in favor of a change to PoS, even perhaps by forcing Bitcoin's hands, then the Ethereum stakeholders (and devs for that matter, not that they are really required to take part) would have their green light to go ahead.
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As an anecdote, when I have talked about working on an attack vector to friends and family, merely the mention of the fact that it could save an electricity consumption the size of Finland's or Belgium's, or whatever it is exactly, immediately makes them quite excited and positively interested in it. Obviously there's a bias here to take into account, but nonetheless I can't help but feel that a large part of the public would be quite positive towards a change from PoW to PoS, and quite frankly perhaps even enough to be in support of Ethereum making a power move on Bitcoin in order to force such a change.
I think we are going in the wrong direction when we push Bitcoin in the direction of PoS if our main motive is to save energy and reduce the impact on the environment. If we look at the objective data, we see that BTC mining is actually very energy efficient and belongs to those activities that make maximum use of renewable energy sources.
Taking examples of countries that spend the same as BTC is quite biased if we do it just because we want to convince someone that ETH is better than BTC in this respect. I agree that PoW is not perfect if we take into account the possibility of 51% attacks, but in terms of decentralization and transaction security, it is a far better choice than PoS.
https://bitcoinminingcouncil.com/wp-content/uploads/2023/08/BMC-H1-2023-Presentation.pdf
I honestly think you might be right about the fact that if we asked the devs and/or stakeholders right at this moment if they would be supportive of such an attack, their first answer would probably be no.
But on the other hand, I think that with the potential growth of their assets of around 100% or more looming on the horizon, that mentality is bound to slowly change over time, at least for a good portion of the stakeholders.
~snip~
I say let them try, any time and any way - but I'm pretty sure it wouldn't end well for them. In addition to the anger of the majority of the crypto community, they should count on the possible legal consequences that can arise from such actions.