51% Attack: Ethereum Classic is the Most Unsafe PoW Network, Bitcoin is the Safest Per LongHash
As far as technology is concerned the world is thankful because pretty much everything human beings enjoy today can be traced to some technological advancement or the other. However, with the increase in technological innovation, there’s almost an equal increase in the risk of these advancements being compromised. The cryptosphere has suffered its fair share of breaches from many cybercriminals and like the case of the Cryptopia exchange, some of these victims have been unable to recover from the loss, causing them to shut down and liquidate.
For Proof-of-Work (PoW) digital assets specifically, there is a possibility that with all the right (or wrong) conditions in place, these digital assets are quite prone to the
“51 Percent Attack”.
LongHash, a firm which specialises in cryptocurrency analysis, recently published a study on the 51 percent attack, mentioning the digital assets most vulnerable to such.
What Is The 51 Percent Attack?
This describes a situation where one single entity or person, controls at least 51% percent of the mining power of a PoW network. If this much power falls into the hands of just one entity, that one person would be able to alter the network in such a way that stop or even reverse transactions like they were never initiated in the first place. This would also make it easy for the attacker to double-spend.
For a 51 percent attack to be carried out successfully, two things have to be in place.
1. Firstly, a network’s mining power must be more than 50% available for purchase or rent and then acquired by one single entity.
2. The entity must be able to afford the purchase or rent of the mining power and at the same time afford the staggering amount of energy required for that much simultaneous mining.
A 51% attack is mainly theoretical because of the difficulty required in meeting the above conditions.
What Assets are More Prone?
Longhash used data from OnChainFX as available on the 19th of June to analyze and collate these results. It took into account the potential cost of a one-hour attack on a network and the available mining power on NiceHash for the networks considered. It also considered the ten most noteworthy PoW assets which are Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Dash (DASH), Bitcoin Satoshi Vision (BSV), Zcash (ZEC), Monero (XMR), Ethereum Classic (ETC) and Bitcoin Gold (BTG).
The analysis revealed that of these ten, Bitcoin (BTC) is the safest as it has a very small amount of power for purchase or rent on NiceHash and also has a very heavy cost for attacking for an hour. The position for the most prone digital asset to a 51 percent attack is the Ethereum Classic (ETC). Longhash found out that NiceHash has more than 80% of ETC’s mining power available for purchase. Also, it would cost less than $10,000 to keep ETC under attack for an hour. BTG however is the cheapest to attack.
Earlier in January this year, ETC suffered a 51 percent attack which caused a few exchanges to temporarily cease all ETC transactions to prevent loss of funds. After a while, some normalcy returned to the network but not before a lot of double-spending had caused a loss of 219,500 ETC ($1.1 million).
In summary, however, LongHash states that most cryptos are currently relatively safe from trouble.
“All in all, it looks like most Proof of Work tokens are relatively safe from this risk, with Bitcoin ranking as the clear winner.”