51% attack on altcoins possible for as little as $500, report finds
Hashing power for rent has made it easier—and cheaper—than ever to attack altcoins, with 51% attacks now possible for as little as $500.
According to data released by Crypto51.app, a website tracking the theoretical cost of such attacks, Bytecoin (BCN) can be attacked from just $558 for an hour, while BTC Private (BTCP) can be attacked from just $778—making it more affordable than ever to disrupt the cryptocurrency ecosystem.
BTC Gold (BTG) can be attacked from $3858, while Ethereum Classic is vulnerable for just $10,643. BTC Coin, which remains the largest by market cap despite its flaws, can be attacked with change for $554,000.
Previously, bad actors looking to launch a 51% attack on an altcoin with a Proof of Work (PoW) algorithm would require significant hashing resources, not to mention a degree of planning and preparation. However, with hashing power now available on demand, there is growing concern that Proof of Work coins could be vulnerable to an increasing frequency of these attacks in future.
The cost of each attack is calculated on the assumption that it would be possible to confirm at least six blocks on each coin, which could be used to process double spend transactions, allowing funds to be extracted via third party exchanges.
In practice, there is some doubt as to whether this kind of attack would be effective within an hour, with any such attack likely to attract immediate attention, and exchanges likely to be alert to the possibility of suspicious transactions.
However, as the recent attack on BTC Gold showed, carving a loss of $18 million, it is still possible for these types of attacks to have significant consequences.
Meanwhile, Verge confirmed it had fallen victim to a third 51% attack this week, showing the problem for Proof of Work coins is far from academic.
Proof of Work is considered to be safer than the alternative consensus mechanism, Proof of Stake. However, smaller coins with comparatively lower hashrates are vulnerable to these types of attacks. Eli Afram recently discussed the difference between the two algorithms, and noted how “Proof of Stake endangers the cryptoverse of a return to the pitfalls of a fiat system,” where money is centralized in the hands of a few.
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