Ethereum can afford a 51% attack on Bitcoin, and could profit greatly from it

[mjdamgaard]

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

[ABCbits]

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? It only mention word "profit" once on reference section, so i'm not sure i found correct link.

[Bobcrypto]

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.

[Charles-Tim]

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.

[yhiaali3]

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.

[Stompix]

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.

[mjdamgaard]

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? 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.

[mjdamgaard]

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.

[bitmover]

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.

[mjdamgaard]

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.

[Stompix]

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.

[mjdamgaard]

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).

[bitmover]

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? 

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.

[mjdamgaard]

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? 

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.

[Fivestar4everMVP]

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.