Network Security Putting Platforms at Heightened Risk for 51% Attack in Multi-Billion Dollar Crypto Industry
Network security is important in the cryptocurrency world, though some PoW curries have found the algorithms that big-business platforms offer. With these complex algorithms, smaller networks with a 51% attack are exponentially easier to infiltrate.
The biggest assumed appeal of Blockchain technology is the ability to maintain security of crypto assets, but there are many experts that dispute that idea. All of the technology behind it is still fairly recent, and the rising value of these assets makes cryptocurrencies more profitable to steal from. The high-risk/high-reward concept of the platforms challenges hackers to get deeper into the $330 billion industry.
Even though the security of the most experienced and successful platforms is still top-notch, smaller cryptocurrencies aren’t as lucky. They use the same mining algorithms, but small platforms haven’t afforded themselves the same protection. One prime example of Ethereum Classic (ETC), which uses the same technology as Ethereum, but without the same hash rates that they can use on the network. Miners get the same rate no matter what.
Inexpensive Death Of Blockchain
In research performed by the FECAP University in Brazil, it was discovered that an attack on the ETC network would take about $1.5 million, though the user might take away a small profit still. With $55 million at the hacker’s disposal, bankrupting the platform would take very little effort, and would even yield almost $1 billion in revenue for the user.
In one part even took over 2.5% of the hash rate to ETC, they would have 51% control of the network, making them the primary controller. The party wouldn’t have to spend much on the platform, since they would get the same amount that they would for mining in their profits.
This situation includes the need for the user to get the right hardware, prepare infrastructure, and pay for the cost of electricity in the process. To create the estimation by the FECAP University, they used the Rindex v2.0 model for hashing, though the use of this device may be much cheaper that other opportunities.
In the research performed by the company for Bitcoin Cash and Bitcoin Gold, they established that a 51% attack would be 250 BTC ($2 million) or 26 BTC ($200,000). These attacks will not likely stop happening until the industry value of tokens dips too low for the hacking to be worth the profits.
Take a look at this fine resource that shows what it would take to build a 51% attack campaign against these popular coins:
How Does This End?
However, the top ten platforms have such a high value that it would be to costly to attack them in the first place, which is how they stay above these hackers.
There’s plenty ideas that the industry has that could protect the platforms more safely, like Proof-Of-Stake protocols and updating the current algorithms. However, it is up to the companies to make these efforts to protect themselves.
For more reading on blockchains and what they are made of, please read the following: