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Cost of a 51% attack for different cryptocurrencies?

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Re: Cost of a 51% attack for different cryptocurrencies?

#51

Post by gambler »

Computational power is not a good proof of anything. It devours energy and disproportionately rewards weird market actors (like people with custom mines ASICs).

I always wondered whether storage could be used as proof of stake. It might use less energy and it probably will have much better effect on the IT industry as a whole. First, mining ASICs are not general computational devices and cannot be used for anything useful. On the other hand, storage is storage and can be repurposed. Second, it will up the prices for storage hardware, but that is probably a good thing in the long run. (Consider how super-cheap storage enabled unlimited surveillance and software bloat, for example.)

I don't know whether access to storage can solve all the problems a blockchain solves, but it can solve some. Like proving that you're a real actor in the system, rather than a temporary fake.

Some random ideas I had about how this could work:

If you want to transact with someone, they send you a challenge that consists of a set of addresses in a large file. You must respond with a hash of data at those addresses, problematically proving that you have the entire file.

This is the foundation. There are obvious challenges to how useful this is. Many of them are solvable.

Re: Cost of a 51% attack for different cryptocurrencies?

#52

Post by joosters »

csomar wrote: post #41
glofish wrote: post #21

It feels surprisingly cheap. Take bitcoin, a 105Billion cap can be subverted for just 700K per hour? Not to mention DeepOnion for 3 bucks an hour. I can see people do that just for lulz.

The thing is, what you can do with a 51% attack is very limited and the big services are probably going to be aware of it. Best case scenario is that you halt transactions for a few hours. This will cost a few million dollars with, maybe, no possible reward. The next problem is that this calculation is based on the current hash-rate cost. However, you don't have that much hardware and it'll be close to impossible to…

You can do much better than that! The simplest way to profit from a 51% attack is to send some coins to a crypto exchange, wait for the required 'n' blocks to confirm your deposit, then 51% attack the chain to remove your original payment. At the same time, you can either withdraw your ill-gotten coins from the exchange, or trade them for something else and withdraw onto a different blockchain entirely.

This mechanism lets you double your money (minus the cost of the 51% attack)

Re: Cost of a 51% attack for different cryptocurrencies?

#53

Post by Proven »

gambler wrote: post #51

Computational power is not a good proof of anything. It devours energy and disproportionately rewards weird market actors (like people with custom mines ASICs). I always wondered whether storage could be used as proof of stake. It might use less energy and it probably will have much better effect on the IT industry as a whole. First, mining ASICs are not general computational devices and cannot be used for anything u…

> disproportionately rewards weird market actors (like people with custom mines ASICs).

1) Weird? It seems we'd need a government to set some decency standards for those guys!

2) Disproportionate awards: what would be the right proportion to their work? $15/hr for every miner including those mining on mobile phones?

Regarding the article, whatever the cost - "too high" or "too low" - proof of work as implemented in Bitcoin won't survive for long (google it). I don't care how much energy it uses or how much pollution it creates, but I also don't think that its fee market rules are optimal.

Re: Cost of a 51% attack for different cryptocurrencies?

#54

Post by 7777fps »

pat2man wrote: post #12
7777fps wrote: post #9

Earlier quoted context omitted.

If you can hash faster than everyone else combined you can re-write history. So you could make a transaction and then re-write that transaction out of history allowing you to spend that money again. When you make a valid transaction, you have the necessary details for both that valid transaction and no transaction at all. Just because you can't make invalid transactions doesn't mean you can't effectively steal. This…

It’s an eventually consistent system, so you can defraud people who don’t take that into account. But internally it will always be consistent.

And by "don't take that into account" you mean "transact anything off chain" including other currencies, goods, services, etc.

Re: Cost of a 51% attack for different cryptocurrencies?

#55

Post by latchkey »

glofish wrote: post #21

It feels surprisingly cheap. Take bitcoin, a 105Billion cap can be subverted for just 700K per hour? Not to mention DeepOnion for 3 bucks an hour. I can see people do that just for lulz.

Andreas Antonopoulos offers sane advice on this...

https://www.youtube.com/watch?v=ncPyMUfNyVM

Re: Cost of a 51% attack for different cryptocurrencies?

#56

Post by esotericn »

yodsanklai wrote: post #29
skitout wrote: post #25

Earlier quoted context omitted.

The market cap does not fit into the equation on how an attack works ; it just gives you idea on how big/small is this blockchain Blockchain don't have a centralized entity to "validate" and secure each transaction, so had to come with a solution to securely do so in a decentralized manner... Most blockchain use Proof of Work to do so : to participate on the validation process you have to "pay", by working on some ma…

But if it costs only $3 to break the system, how come the market cap is so high?

Because the market cap of the tiny "currencies" is total bullshit and is based on two guys trading with each other, it's like me buying 0.0001% of your company for $1 and then you claiming it's worth $1M.

Bitcoin Gold is not seriously used by anyone.

The larger currencies are slightly more reasonable but even then the valuation is unhinged because, for example, a lot of Bitcoin has probably been permanently lost.

Re: Cost of a 51% attack for different cryptocurrencies?

#57

Post by rodonn »

maliker wrote: post #48

Anyone know how to calculate the revenue side of these attacks? E.g. if it costs 700k to attack the bitcoin network for 1 hour, how much money could you make in that hour (say based on average transaction volumes)?

It depends. Roughly speaking the revenue is

(Largest transaction you can cash out at exchanges) * (1 - (The decrease in value of the currency you attacked)) + (Block rewards earned).

Basically you get someone to give you cash in return for your cryptoX and then the attack lets you undo the transaction that gave them the cryptoX (but you still have the cash you got). The second term handles the fact that the attack may have cause the value of cryptoX to decrease which hurts you since you still hold the cryptoX you double spent.

This is an academic paper that looks into the details more closely https://faculty.chicagobooth.edu/eric.budish/research/Econom...

Re: Cost of a 51% attack for different cryptocurrencies?

#59

Post by WAHa_06x36 »

skitout wrote: post #5

1) If a big crypto-community notices an attack, the cost of a 51% attack would rise 2) There are mechanisms to offer smaller cryptocurrencies Bitcoin level security, like Komodo's Delayed Proof of Work ( https://komodoplatform.com/security-delayed-proof-of-work-dp... )

> If a big crypto-community notices an attack, the cost of a 51% attack would rise

Would it though, really? Why?

On the contrary, someone performing a 51% attack can and will freeze out all other miners, leaving them operating at a pure loss. If the attacker manages to keep up the attack, he will be able to bankrupt the competing miners, forcing them to turn off their hash power, and thus lowering the cost for himself.

Re: Cost of a 51% attack for different cryptocurrencies?

#60

Post by Meekro »

There is absolutely no way to 51% attack a major coin like Bitcoin for as little as $700k an hour. They are extrapolating from Nicehash's mining rental prices, but Nicehash doesn't have anything like the capacity you'd need.

You can see here[1] that nicehash has about 500 PH/s (500,000 TH/s) available for rent. However, Bitcoin's total hash rate right now is 100,000,000 TH/s[2]. This means that if you rented out the entire nicehash market, you'd have 0.5% of the hash rate you need.

Could you get the other 99.5% by buying lots of mining hardware? Theoretically yes, but realistically no. Bitmain is a major supplier of this kind of hardware, so let's use their prices as a reference. They're currently promoting a 67 TH/s unit for $1585 [3]. You would need more than 1.4 million of these units, at a cost of over $2.2 billion dollars. Not that any supplier can fill an order like that quickly.

And we haven't even gotten to the power and operations costs. You'd need dozens of huge data centers to run all this hardware, each one consuming astronomical amounts of electricity. You'd probably pick your data center locations based on availability of cheap power and labor, and you'd become a major commercial presence in each of those towns. The local papers would have photos of you shaking hands with the mayor as your data centers open up. Everyone would know what you're doing, including the FBI.

[1] https://www.nicehash.com/my/marketplace/SHA256 [2] https://www.blockchain.com/en/charts/hash-rate [3] https://shop.bitmain.com/product/detail?pid=0002020011715132...

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