February 8, 20184min1644

Could a 51% Attack on Bitcoin cost Just $20M Dollars?

A 51% attack on the Bitcoin network is a theoretical possibility if a single malicious actor obtained the majority of the hashing power of the network. This would give them the ability to mine new blocks faster that all other miners combined. The network always accepts the chain with the most work completed (i.e. the longest). Hence, it would accept this new chain as the valid one.

In the early days of it would have been relatively easy to pull off this attack on Bitcoin, but no-one bothered. However, now Bitcoin is all grown up and it could potentially pose a threat to the establishment’s financial system. A nation state or a large bank might begin to consider investing in such an attack to discredit and devalue Bitcoin.

The question then becomes how much would it cost and what would its chances of success be? In the video below, the author seems to suggest that as little at $20million would have been enough at that time. Instead of closer to $1billion as suggested by most other people.

It’s a very interesting video and well worth the time watching. It covers many different aspects of such an attack. But even if such an attack was theoretically possible … What would its chances be of successfully bringing down the Bitcoin network?

In the video below, Andreas Antonopoulos, a world renowned Bitcoin expert, gives his opinion on the subject.

Essentially what he says is that after the attacker would have covertly spent billions of dollars to establish a 10 minute long dominance over the network, they would quickly get discovered (since the blockchain is being carefully watched). The honest miners would simply reject any future blocks from them, isolating them from the network and effectively rendering them a new fork.

It is a very important point that he makes here, in that the Bitcoin network is not a passive, static network. It is carefully watched and it can evolve and even fork off if necessary to reverse and prevent these types of attacks. In fact this has already happened to Ethereum back in June 2016. An attacker then managed to siphon out $50 million worth of Ethereum trough a DAO loophole. The Ethereum network voted to create a hard fork and reverse those transactions.

Also there is absolutely no monetary incentive to destroy the Bitcoin network. You can make an awful lot of money if you instead just play nice and work with the network. Turns out greed can be used for good too.

In summary, Bitcoin had indeed managed to create something that even the murkiest of forces simply cannot defeat anymore. They can of course try to regulate and tax it. But to take it out entirely would be political suicide for just about any government.

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