Right after news broke that the Ethereum Classic (ETC) cryptocurrency had been the victim of a 51% attack, one twitter user by the name of Crypto Tesla noted that a cryptocurrency has to be open for such attacks if it were to remain decentralized. His tweet was in response to one by Coinbase announcing that they had detected a deep chain reorganization of the ETC blockchain that included a double spend. A screenshot of the tweet can be found below.
Charlie Lee Elaborates on Why A Decentralized Cryptocurrency has to Be Susceptible to 51% Attacks
It is from this tweet, that Charlie Lee elaborated on what Crypto Tesla had first observed. Charlie Lee’s exact words and tweet can be found below.
This is a thought-provoking observation.
By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources.
If a crypto can’t be 51% attacked, it is permissioned and centralized.
What Exactly is a 51% Attack?
A 51% attack on a Proof-of-Work powered blockchain involves a group of miners controlling more than 50% of a its’s mining hashrate. With this advantage, they can send funds to one address on the main chain of the network while sending similar funds to another address on a forked copy of the blockchain that they are also silently mining. Other nodes only recognizing the main chain will see the first transactions as valid. The malicious miners can then release the silently mined blocks on the second chain and other nodes will accept this as the new correct chain since it is longer. The original transaction will disappear and nodes will now recognize the funds from the new chain thus creating a double spend situation.
How Much Would It Cost to Carry out Such Attacks?
According to Cyrpto51.app, even Bitcoin can be attacked with the right amount of capital to fund the operation. For a one hour attack, malicious miners can carry out attacks on major networks using the following amount of funds:
- Bitcoin (BTC) – $332,998
- Ethereum (ETH) – $97,734
- Bitcoin Cash (BCH) – $10,716
- Litecoin (LTC) – $23,222
- Ethereum Classic (ETC) – $5,000
With the recent ETC 51% attack estimated to having double spent $450,000, we can now see why someone would be motivated to organize such an event. Using the $5,000 cost quoted by Crypto51.App, the rogue miners made a profit of 8,900% on the ETC attack.
What are your thoughts on Litecoin’s Charlie Lee stating that a decentralized cryptocurrency must be susceptible to 51% attacks otherwise it is permissioned and centralized? Do you agree with his observations? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.