What is the 51% Attack Cost?
Some PoW-currencies enable the same mining algorithms as its larger alternatives, which facilitates hacking of small networks via the so called 51% attack.
Blockchain technology is considered to be a completely safe system yet it is so not in every instance. It is relatively new, and as prices for popular cryptocurrencies as well as reward for hacking rising, growing number of people keep on looking for sophisticated ways to attack the industry.
Striking example for this is Ethereum Classic (ETC). The cryptocurrency uses the same algorithm as Ethereum yet has got lower total hash-rate in the network. Miners receive equal hash-rate form their machines regardless of the network they use.
FECAP University crypto researchers from Brazil have proven, to attack ETC network hackers need just about $1.5 million and they still get some profit on it. With 55 million dollars you may make the cryptocurrency go bankrupt and make $1 billion revenue.
If one user with just 2.5% of Ethereum hash-rate switched to ETC, he or she would instantly take control over 51% of the total network hash-rate. The attack would not cost much in that case: 2.5% of Ethereum hash-rate equals to approximately 525 ETH, or $318,000.
Standard scenario with 51% attack demands acquiring hardware, infrastructure customization and covering power costs. The researchers used the Rindex v2.0 model which takes account of hash capacity leasing that may prove to be by far cheaper than full crypto mining setting up.
The researchers have shown figures for Bitcoin Cash and Bitcoin Gold. A 51% attack at BCH net would cost you 250 BTC or $2 million a day. Attacking Bitcoin Gold would be less expensive, just about 26 BTC or $200,000 USD a day with the same hash rate leasing. They may repeat until developers come up with update which protects the network against this attack or until price falls to the extent that makes the whole attack unprofitable.
Over the last months there have been detected at least five 51% attacks at cryptocurrencies with some well-known ones like Verge and Bitcoin Gold among them, but most of the cryptocurrencies of the top-10 have got quite high hash rate so attacking them would cost too much.
Currently there is a number of solutions that would make 51% attacks almost impossible in future: Proof-of-Stake protocols, hashing algorithm updates and sharding may well help in it.