Will $6 Billion Destroy Bitcoin? Finance professor: The cost of BTC’s “51% attack” is not that high
A study by a finance professor at Duke University pointed out that the risk of a "51% attack" faced by Bitcoin has been seriously underestimated, and an attacker would only need about $6 billion to destroy the Bitcoin network. This article originates from an article written by Foresight News and is compiled, compiled and written by Foresight News.
(Previous summary: El Salvador split 6,285 Bitcoins into 14 wallets: resisting the threat of quantum attacks)
(Background supplement: In the face of quantum attacks, should Satoshi Nakamoto’s 1.09 million Bitcoins be moved? )
A finance professor at Duke University published a paper stating that the threat of a "51% attack" faced by Bitcoin has been seriously underestimated by the market, and attackers can buy 46 100 million US dollars in hardware equipment, 1.34 billion US dollars invested in building a data center, plus about 130 million US dollars in electricity costs per week, to complete the control of the Bitcoin network within a week.
Latest research shows that the threat of a "51% attack" faced by Bitcoin is seriously underestimated by the market, and an attacker would only need about $6 billion to destroy Bitcoin.
On October 9, Duke University finance professor Campbell Harvey warned in the latest research that although both Bitcoin and gold are regarded as the darlings of "currency depreciation transactions," the risks faced by Bitcoin far exceed those of gold.
An attacker can complete control of the Bitcoin network within a week by purchasing $4.6 billion worth of hardware equipment, investing $1.34 billion in building a data center, plus electricity costs of approximately $130 million per week.
By shorting Bitcoin through the derivatives market, attackers can make huge profits when the price of Bitcoin plummets, enough to cover the cost of the attack. Harvey emphasized:
You could destroy the value of Bitcoin with $6 billion. Although this attack sounds too technical, it is very credible.
Matt Prusak, President of Bitcoin Corporation of America, believes that this concern is exaggerated. It will take years to accumulate and deploy mining equipment, and short selling requires huge collateral, and exchanges may also suspend suspicious transactions.
51% Attack: A Fundamental Threat to Bitcoin
A 51% attack is a situation where a single party controls more than half of the computing power of a blockchain network.
Once successful, the attacker can tamper with the ledger, forge transactions, and even conduct a "double-spend attack" - that is, the same digital token is used repeatedly. In contrast, gold does not present similar systemic risks.
In addition, the current boom in the Bitcoin derivatives market provides economic incentives for 51% attacks.
Harvey's paper points out that traders can establish short positions and use less than 10% of the average daily trading volume to obtain huge profits, enough to cover the cost of the attack.
This profit mechanism greatly increases the economic feasibility of attacks, especially considering that the cost of an attack only accounts for 0.26% of the total value of the Bitcoin network, which is far lower than many investors expected. Harvey emphasized:
The low cost of attack is a serious problem for the future viability and security of Bitcoin.
Harvey further pointed out that such attacks are likely to be carried out overseas because many regions lack effective market manipulation prevention measures.
The industry is divided on the risk of attacks
Despite Harvey's serious warning, the industry is divided on this.
Prusak believes that economic viability is not sufficient to support the 51% attack theory, stating:
It would take years to accumulate and deploy sufficient mining equipment, which is not feasible in reality.
Prusak also emphasized that shorting Bitcoin requires huge amounts of collateral, and if an exchange suspects manipulation, it may suspend trading, preventing attackers from cashing in on their gains.
Other blockchains have indeed been hit by 51% attacks before and survived.
Bitcoin forks Bitcoin Gold and Ethereum Classic have both been attacked, but they are smaller blockchains with less miner support and are more susceptible to manipulation.
