The Low Cost of a 51% Attack, and Why Dash Might Not Make it to Coinbase
The recent 51% on Ethereum Classic (ETC) reminded the crypto community that even in a decentralized world, centralization can still be bought for the right price.
Indeed, according to independent data from Crypto51.app, the entire Ethereum Classic network can be controlled for an outlay of just $4,814 per hour. That level of insecurity might make one question how ETC ever made it to Coinbase, which in the past has been so eager to play it safe regarding its coin listings.
U.C Berkeley professor, and self-professed crypto skeptic, Nicholas Weaver recently said in The Verge that any coin with such a low attack cost should be considered too risky for public consumption:
“Any coin not burning $100,000 per hour should probably be considered insecure in the face of attackers, and should not be supported by any exchange. That Coinbase supported a coin that has just $5,000 per hour of protection is negligence.”
The Ethereum Classic heist eventually lead to the theft of over $1 million in coins. And now attention may be turning to other prominent cryptocurrencies which can be hijacked for even less than the $4,814 it took to control ETC.
Literally Buying Dash
According to the same statistics which display ETC’s vulnerabilities, over 51% of the Dash network can also be bought for just a few thousand dollars. It would currently require $3,014 per hour to control 74% of the the Dash network via Nicehash – a crypto cloud-mining marketplace.
Going back to Ethereum Classic, it’s interesting to note that Coinbase currently requires 50 confirmations for ETC transactions, which equals roughly ten minutes, based on 14 second block times. This acts as a failsafe against any catastrophes, assuming they’re noticed in time.
Likewise, despite Dash’s InstantSend feature, many exchanges still prefer to wait for fifty confirmations for Dash transactions, essentially undercutting one of the prime features of the technology.
With Coinbase coming under so much negative press from the Ethereum Classic fallout, will they be likely to opt for another similarly risky proposition in the near future?
Zcash, Monero, Bytecoin…
Another current Coinbase listee, Zcash (ZEC), also has the indignity of appearing on Crypto51’s ‘cheap’ list. The ZEC network can currently be controlled for $18,350 per hour, but fortunately only 7% of the mining power can be bought via Nicehash, meaning an attacker would have to round up more network resources from other sources.
Also on the list is Bytecoin (BCN) – 51% of which can be acquired for just $237 per hour. Also available for the surprisingly low cost of just $5,772 per hour is Monero (XMR). However the mining power is distributed enough so that only 6% is available via Nicehash.
Dash Price – DASH/USD
The Dash coin price paid little heed to such concerns on Wednesday, as it climbed 7% from $81.05 to $87.30.
With or without Coinbase, Dash averaged daily volumes of $120 million for the past month, and the team continues its adoption push through South America.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.