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ETC has kicked off the 51% attack festival in style, and there are many more where it comes from.
2019 will be the year of the 51% attack, suggests David Vorick of Siacoin and the extraction of the obelisk.
There are at least 10 reasons why.
1. Hashrate Marketplace
The possibility of hiring mining power from hashrate markets, particularly from Nicehash, will continue to facilitate attacks.
This can be thought of as a large pool of mining power that can be accessed on demand because it is exactly what it is.
Vorick puts it in perspective:
"Before the explosion of marketplaces, attacking a cryptocurrency with 100,000 GPUs that defended it was more or less necessary to own 100,000 GPUs, the attacks of that scale would require tens of millions of dollars to be executed … After the development of marketplaces of hashrates, the same 100,000 GPUs can be rented for several hours at a cost of a few tens of thousands of dollars. "
2. Other ASICs have been released
ASIC miners are high-powered mining machines and are still under construction.
Over time, you will have more ASIC machines on the market. And 2018 has provided some very clear traces of cause and effect in which the release of a new ASIC miner for a given algorithm is followed by 51% attacks.
Recently, says Vorick, there are ASICs for Ethash and Equihash.
Ethereum Classic has recently been chewed by a 51% attack among the rumors of a new miner from Ethash's ASIC. The Equihash ASIC offered an even more embarrassing lesson, with Bitcoin Gold and ZenCash and Bitcoin Private (all Equihash) falling like dominoes after the ASIC Equihash hit the market.
The main reason why ASIC miners leave so many cryptocurrencies so vulnerable is not just because the miners use them to attack directly. Rather, it is because they invade Nicehash with much more supply, which drastically lowers the cost of the rental that has hashrate for that algorithm. The result is that an ASIC release almost immediately makes any currency of that much more vulnerable algorithm.
3. Too many forks and too much sharing of mining algorithms
Doing your own data mining algorithm is a lot of work. It is much easier to just forge some other coin or re-use a mining algorithm that you see elsewhere. There are no signs of this trend that will fade in 2019.
The most obvious reason why this leads to 51% of attacks is because it means that about the same amount of hashing power is shared between multiple coins, leaving each of them more vulnerable.
This is exacerbated by another more insidious vulnerability, observes Vorick. The sharing of the mining algorithms causes further interruptions in the "compatibility of incentives". This is the principle that the incentives of individual participants are aligned with those of the network as a whole.
The idea is that a miner does not want to attack the cryptocurrency they are digging because it risks damaging the value of their equipment and cryptocurrency. But when the miner himself can use his tools to attack some other cryptocurrency, they do not have this obstacle.
4. The attackers have become much more sophisticated
The cryptocurrency boom in late 2017 has seen many people pay attention to the industry for the first time and 2018 has been highly instructive for many people. In other words, there are more people with the skills to make a 51% attack today than a year ago. This literally means that there are more 51% strikers looking for goals now.
At the same time, more able attackers can turn a profit where a less experienced attacker can not.
Although they are commonly known as "double expense" attacks, Vorick notes that, in the more sophisticated part, they could also be a triple or quadruple expense attack.
5. Mining companies continue to grow
Economies of scale govern the mining industry, so the mines are getting bigger and bigger. And with their economies of scale, they are also the most likely to survive recessions.
Now there are many companies with over 10,000 mining machines, a handful of over 100,000 machines and at least one with over 500,000 units.
Correspondingly, this means that if your cryptocurrency has less than 10,000 machines working on it, it can be easily and alone defeated by a mining farm. If it has less than half a million cars on it, it's still vulnerable.
6. The bear market has reduced the prices of the hardware
The fall in cryptocurrency prices has made video cards much more accessible. This is good news for players and attackers alike. It has also made ASIC miners more accessible, and every mining company that has ceased operations, means another sale of new fires on mining gears.
At the same time, there are a lot of new companies running out of money with hashrates to sell and every reason to launch a 51% attack where possible.
With the collapse of cryptocurrency prices, it has become much easier to launch a 51% attack.
7. The bear market has reduced the prices of cryptocurrencies
The miners' blocking prizes determine the amount of hashrate supported by their networks. This is a combination of programmed tokenomics (for example, 3 tokens per block every 10 minutes on average) and cryptographic prices.
If the encrypted prices are too high, a network can not support many miners. As a result, the hashrate will fall and its security will be weakened.
The price of a cryptocurrency must match its mineral block premiums. If there is a misalignment or the price of a currency suddenly drops too much, a cryptocurrency could suddenly become vulnerable.
8. It is easier to short encrypted markets
While the cryptocurrency exchange and exchange scene continued to grow in 2018, it presented many more opportunities to shorten a much wider range of cryptocurrencies. This presents a new way to profit from a 51% attack.
It also presents some new opportunities to use hashrates for things other than 51% of the attacks. With variations such as empty block extraction or selfish extraction, an entire 51% of network analysis is not necessary to negatively impact. This makes more coins vulnerable to more attacks and creates additional incentives for these types of attacks.
9. More exchanges, more goals
Cryptocurrency exchanges may have proliferated rather than diminished in 2018, and more exchanges mean more money and more targets for double spending in the 51% attacks.
This not only offers more low impact fruit opportunities in exchanges with inadequate confirmation requirements, but can also make it easier for an attacker to triple or quadruple spending by hitting multiple exchanges simultaneously.
10. Because it is now 2019
2018 was the year of 51% of the attacks, but now it is 2019 and is still the year of 51% of the attacks. In addition, the Ethereum Classic attack and the resulting repayment drama have ushered in the new year with a real bang that will be hard to beat.
However, Dash seems very vulnerable.
A single entity controlled more than 51% of Dash's hashrate for just over 6 months. And casually, a mining pool took control of 51% of ETC about 6 months before being hit by a 51% attack.
Disclosure: at the time of writing, the author holds ETH.
Disclaimer:
This information should not be interpreted as an approval of a cryptocurrency or a specific supplier,
service or offer. It is not a recommendation for trade. Cryptocurrencies are speculative, complex and
involve significant risks: they are highly volatile and sensitive to secondary activities. Performance
it is unpredictable and past performance is no guarantee of future performance. Consider yours
circumstances, and get your own advice, before relying on this information. You should also check
the nature of any product or service (including legal status and relevant regulatory requirements)
and consult the websites of the competent authorities before making any decision. Finder, or the author, can
have participations in the cryptocurrencies discussed.
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