The cost of attacking a cryptocurrency network is decreasing along with the market crash, and the possibility of a malicious actor or group seizing the majority of computing power in theory becomes more realistic. Attacking Bitcoin is now half the price it was in May this year, while Ethereum’s attack used to be five times more expensive than it is now.
Attacking networks the size of Bitcoin or Ethereum is certainly much more difficult than what it costs due to the amount of participants, but not all networks are that lucky. In theory, you’d only need USD 47 to launch an hour-long attack on Bitcoin Private by renting out enough hashing power from NiceHash, a Slovenian cryptocurrency cloud mining marketplace, according to crypto51.app, a website that tracks costs of a 51% attack.
Other coins seem quite susceptible too: while it would have cost more than USD 72,000 to match the hashing power of Bitcoin Cash for an hour back in May, now it costs only USD 7,896 — nine times less. Popular economist and Bitcoin investor Tuur Demeester points out on Twitter:
100% sure the 51% attack will be done by CSW on BCHABC
— btczcl (@btczcl) December 6, 2018
Theoretical cost of a 51% attack on some of cryptocurrencies that use the Proof of Work consensus algorithm:
Source: crypto51.app, UTC 12.30 PM
Since NiceHash doesn’t have the hashing power for larger coins, the website also lists the percentage of the needed hashing power that is available from NiceHash. For example, you can rent only 1% of the hashing power for Bitcoin, but 3,260% for Bitcoin Private — which, when combined with the price of USD 45, makes such an event all the more likely. Bitcoin’s halving of the price needed to mount an attack, as seen from this perspective, is perhaps the best case scenario here.
This drop could be partially blamed on the fact that miners are packing up and quitting. Since September this year when it saw its all-time high, Bitcoin’s hash rate is 36% down and about 1.4 million servers have been unplugged, according to advisory firm Fundstrat Global Advisors.
And 51% attacks are not just a faraway threat anymore, either. Only recently, cryptocurrency Vertcoin suffered attacks in four distinct instances, reportedly costing it more than USD 100,000 in double spent funds. Earlier this year, the attacks happened to Bitcoin Gold, Verge and Monacoin as well.
According to Mark Nesbitt, security engineer at Coinbase, "expect to see more of these attacks".
However, in case of the most popular cryptocurrencies, the attack could not be a very smart move:
Sure, it doesn't make economical sense on paper, but it seems like peanuts if an entity with large pockets wanted to destabilize (timely FUD for their shorts or attack by a govt)
The hash power is an obstacle, but what if lets say a Bitmain ends up folding, how much easier then?
— ArthR (@CryptoKingArthR) December 6, 2018
Also, Bitcoin evangelist Andreas Antonopoulos believes that the benefits of a 51% attack on Bitcoin are not making up for the extreme effort required. “So unless we were all not paying attention […] there’s nothing they can really do with that. You can’t run away with everyone’s coins just because you got 51%. All you can do is affect the next block. So you can affect the next block and create a double-spend. Big whoop,” Antonopoulos said at an event in January this year.