Ethereum is Becoming Increasingly Vulnerable to AttackBy Andy Hao
Hashrate is one of the key indicators of a Proof of Work blockchain’s health. It signifies the barrier which a potential attacker must overcome in order to launch a 51% attack, and also the overall interest in the community at large.
And right now, hashrate growth is a missing piece for the Ethereum community. Ethereum’s hashrate is still down over 42% from all-time highs in August of 2018. To put this into context, Bitcoin also experienced hashrate all-time highs in summer of 2018, but has since eclipsed its 2018 hashrate high by over 22%.
This is one of many metrics that illustrates the divide in the 2019 crypto community. In prior years, all cryptocurrencies tended to move together, whether prices or on-chain metrics moved up or down. But now, it seems that investors have had enough time to figure out which projects are worth backing and which ones aren’t. This is causing an industry-wide split in market returns (roughly half of cryptocurrencies are below their December 2018 prices), as well as a split in blockchain hashrate among PoW chains. So far, Bitcoin and Litecoin are the only major PoW coins which have achieved hashrate records in 2019.
Bitcoin Cash, Bitcoin SV, and Ethereum all lag behind their respective hashrate records by a very large margin. And while this may not seem like a significant issue on the surface, it opens up these chains to potential attack opportunities. As of today, it costs over $850,000 to mount a 51% attack against the Bitcoin network for 1 hour, while attacking Ethereum for an hour can be done with just over $100,000. Bitcoin SV is the easiest attack opportunity among the major PoW coins, with a 51% attack cost of only $11,000 at the time of writing.
None of the above costs are too high a barrier for nation-states or large corporations to potentially attack a major cryptocurrency. If the major coins are going to survive for years or decades to come, they all must be ready to defend their chains against attacks from far larger and more well-funded opposition.