According to data from Chainalysis, the crash of FTX won't have a long-term effect on the crypto market despite fear and uncertainty.
You might have heard of cryptocurrencies experiencing a 51% attack on their networks and be thinking that it’s awful and how could this kind of thing happen on the blockchain?
Well, because it can only happen on the blockchain – and it is rather awful. Essentially in a 51% attack, malicious miners manage to gain control of a cryptocurrency’s blockchain in a very particular manner of hacking. By gaining more than half the hashing power on a cryptocurrency’s blockchain, it means that one can gain tentative authority over the network and can authorize or censor any transaction for as long as they are in control.
This often leads to “double-spend” attacks, whereby the hacker will first suspend transactions and then if any transactions were attempted while they had control of the network, they would reverse them and move the funds from the transactions straight into their pocket, meaning that the coins would be double-spent – from the originally intended account to the hacker’s wallet.
It might sound like a great debacle to implement a 51% hack, but it can be startling simple owing to the fact that the hashpower needed to hack can be hired from “cloud mining” firms or mining pools. This means that hackers can pay for control of the majority of the blockchain as much as it might cost for a certain time.
Read here for more details on a 51% attack or double-spend hack.
That cost and that time are exactly what we are going to be exploring – how much you would be spending to execute a 51% hack on a major blockchain. Taking values and data from Crypto51, we can find out a hack costs for the networks of Bitcoin Cash, Bitcoin Bitcoin Private, and Old Mac Bitcoin as a comparative.
The original and most valuable cryptocurrency has a market cap of $127,446 billion USD and a blockchain length which sees 7,155,287 BTC in circulation at present. With cryptocurrency’s highest trading rate of $6,337,200,000 USD, it is no wonder that this coin would set a hacker back a pretty token.
To execute a 51% attack on Bitcoin’s blockchain, you would need to squeeze $665.553 USD out of your pockets for some sixty-minutes of hacking fun.
Bitcoin’s first and most controversial hard fork has been the pot stirrer of hack-related news lately, but not for a different sort of attack.
Bitcoin Cash was born out of a desire to remedy the scalability issues that have arisen on Bitcoin’s network in an attempt to resolve the slow and expensive transactions.
The platform has increased the block size from Bitcoin’s one megabyte to Bitcoin Cash’s eight megabytes in order to handle the huge volumes of traffic that companies (such as PayPal and Visa) can cope with. Effectively, this makes transactions cheaper and more viable for easy payments.
Bitcoin Cash retained Bitcoin’s SHA-256 algorithm and has a current market cap of $14.94 billion USD with 17,243,663 BCH in circulation at present. Bitcoin Cash currently has a trading rate of $862.05 USD, and the cost of attacking the network is significantly less than that of Bitcoin – although it still wouldn’t be considered a thrifty endeavor.
In order to attack a 51% hack on Bitcoin Cash’s blockchain, you would need to spend $64,200 USD (almost one-tenth of Bitcoin’s hacking fee) for an hour of authority.
Bitcoin’s most recent hard fork on the network, Bitcoin Private is a youngling in the world of cryptocurrency having only been released earlier this year in February. The net blockchain came courtesy of a combination of the Bitcoin blockchain and the approach of a token with a focus on privacy, Zclassic.
Where Bitcoin is pseudonymous – with users represented as alphanumeric designations – Bitcoin Private opts for a more private system and the sender, receiver and amount sent in a transaction remain private from the rest of the blockchain.
Instead of taking Bitcoin’s SHA-256 algorithm Bitcoin Private claimed Zclassic’s Equihash system which is ASIC mining resistant.
Bitcoin Private’s current market cap of $169,44 million USD and there are 20,491,129 BTCP in circulation The token currently has a trading rate of $8.15 USD, so it is naturally less expensive to attack the smaller network.
In order to successfully conduct a 51% attack on Bitcoin Private’s blockchain, you would need to fork out a measly $276 USD for an hour in the control seat.