The 51% Problem, or why crypto is too expensive to be a currency

[idiom]

So bitcoin as the ur-crypto has a bit of an energy problem. The problem is that it is built in by design as the primary defense of the system.

If you can control more than 50% of the processing you control the entire currency. So the energy cost has to be high enough to not be worth it.

So as bitcoin becomes more valuable the processing cost has to go up as a security measure. This means that the cost of transactions goes up with it though.

For a coin to become a global currency it needs to cost more to corner the processing than any single entity could achieve, so the processing energy consumption has to be higher than the US govt or the Chinese govt could hope to match.

This energy cost has to be on going, it can't be a one off like building a fort around your gold.

My question is, are there any decentralized coins yet that don't have a 51% problem?

[Madison320]

So bitcoin as the ur-crypto has a bit of an energy problem. The problem is that it is built in by design as the primary defense of the system.

If you can control more than 50% of the processing you control the entire currency. So the energy cost has to be high enough to not be worth it.

So as bitcoin becomes more valuable the processing cost has to go up as a security measure. This means that the cost of transactions goes up with it though.

For a coin to become a global currency it needs to cost more to corner the processing than any single entity could achieve, so the processing energy consumption has to be higher than the US govt or the Chinese govt could hope to match.

This energy cost has to be on going, it can't be a one off like building a fort around your gold.

My question is, are there any decentralized coins yet that don't have a 51% problem?

That may be a problem, but it's not the root problem. The root problem with bitcoin is that it has no intrinsic value. There's nothing to put a floor on the value of a bitcoin. For example if the price of gold drops below a certain level people will just keep it and use it rather than sell it.

[idiom]

That may be a problem, but it's not the root problem. The root problem with bitcoin is that it has no intrinsic value. There's nothing to put a floor on the value of a bitcoin. For example if the price of gold drops below a certain level people will just keep it and use it rather than sell it.

The point of a currency is to have no intrinsic value. It makes it a much more neutral measure of value. Gold has a tonne of decorative and industrial uses not to mention hoarding fetishes that confound estimations of value flowing in the economy and price estimation.

[idiom]

To rephrase, any blockchain can have authority over it essentially purchased on the open market.

The only way to stop this occurring is to keep the price higher than the value of the blockchain.

The price is kept high by massive continuous energy usage that must grow as the value of the blockchain grows.

Because of this any blockchain that gets to be worth something is going to have a huge operations overhead vs a centralized security system, otherwise it risks compromise.

[dannno]

If the 51% problem hasn't happened yet, at bitcoin's various sizes of growth, it seems very unlikely to happen in the future when it becomes much bigger.

[Swordsmyth]

If the 51% problem hasn't happened yet, at bitcoin's various sizes of growth, it seems very unlikely to happen in the future when it becomes much bigger.

The government hasn't decided to take it over yet.

[dannno]

The government hasn't decided to take it over yet.

I'm pretty sure if there was a hostile takeover, some measures could be implemented, like an emergency fork, or something of that nature.

[Bern]

If the 51% problem hasn't happened yet, ...

It almost did roughly 5 years ago:

https://qz.com/165273/the-existentia...now-at-hand/#/

[idiom]

If the 51% problem hasn't happened yet, at bitcoin's various sizes of growth, it seems very unlikely to happen in the future when it becomes much bigger.

The problem isn't the hostile takeover happening. The problem is the ongoing cost to prevent it.

[Swordsmyth]

The problem isn't the hostile takeover happening. The problem is the ongoing cost to prevent it.

Both are a problem.

[Mordan]

The problem isn't the hostile takeover happening. The problem is the ongoing cost to prevent it.

You have it backward.

51% attacks are very inefficient. You also forget that blockchain users can choose their own consensus.

The cost to prevent a 51% attack is a cohesive and aware community of users and miners.

The recent Hash War (BCH vs BSV) showed that 51% attack are very hard and very stupid because you are basically pissing money in the wind.

I believe BSV is a CIA funded experiment to gain hands on knowledge on the mechanics of 51% attacks.

[Mordan]

My question is, are there any decentralized coins yet that don't have a 51% problem?

Bitcoin, Litecoin and Ethereum and Monero at the top Proof of Work coins that don't have a 51% problem.

[idiom]

Bitcoin, Litecoin and Ethereum and Monero at the top Proof of Work coins that don't have a 51% problem.

How many currencies would survive having days or a week of all transactions unwound?

Cost per 1hr attack on the top coins:

https://www.crypto51.app/

All-in, from scratch, cost of taking control of bitcoin a mere $1.4 Billion:

Calculations and Math

Fixed Costs:
The 7 day average of the Bitcoin network hash rate, as of November 23rd 16:00 UTC, is 41,483,931 terahashes.
https://www.blockchain.com/en/charts/hash-rate

S9i ASIC specifications: 14 terahashes; consumes 1320 Watts; costs $307 per unit
T15 ASIC specifications: 23 terahashes; consumes 1541 Watts; $913 per unit
https://shop.bitmain.com

To acquire more than 50 percent of the Bitcoin network, an attacker would need at minimum the same number of ASICs that are already in circulation.

Network hash rate / terahashes per ASIC = number of ASICs necessary to acquire 50 percent
41,483,931 network terahashes / 14 terahashes = 2,963,138 S9is
41,483,931 network terahashes / 23 terahashes = 1,803,649 T15s

Calculations for total current ASIC usage: 2,963,138 * 1.75 (crude estimate accounting for older models) = 5,185,492

2,963,138 S9is * $307 per S9i = $909,683,366
1,803,649 T15s * $913 per T15 = $1,646,731,537

Including bulk discount of 10 percent for the size of the purchase and economies of scale.

Total for S9is after discount = $818,715,029
Total for T15s after discount = $1,482,058,383

Infrastructure costs such as housing are a multiple of hardware costs from anywhere between an additional 22 percent to 40 percent, according to the CEO of a large-scale mining operation based in Canada. We will use the low figure to again account for economies of scale.

S9i infrastructure costs: $818,715,029 * 22% = $180,117,307
T15 infrastructure costs: $1,482,058,383 * 22% = $326,052,844

Variable Costs:
Costs of daily electricity consumption for S9i:
2,963,138 ASICs * 1320W = 3,911,342,160 Watts
3,911,342,160 Watts / 1000 = 3,911,342 kWh
3,911,342 kWh * 24 hours = 93,872,212 kWh per day
93,872,212 * $0.03 per kWh = $2,816,166 per day in electricity
Electricity costs based the low-end of the electricity rates in Washington State, the state with the average lowest electricity costs in the United States: https://www.electricitylocal.com/states/washington/

Costs of daily electricity consumption for T15:
1,803,649 T15s * 1541 Watts = 2,779,423,109 Watts
2,779,423,109 Watts / 1000 = 2,779,423 kW
2,779,424 kW * 24 hours = 66,706,155 kWh
66,706,155 kWh * $0.03 per kWh = $2,001,185 per day in electricity

Cost of labor and maintenance above electric costs: 10%. This is an estimate based on an interview with two different large-scale miners in Canada and Georgia who chose to remain anonymous.

Average kWh: ((((3,911,342,160 Watts + 2,779,423,109 Watts) / 2) * 24 hours) * 365 days) / 1E12 watt hrs per terawatt hrs = 29.3 TWh

This estimate is short of Denmark’s oft-cited annual energy consumption of 32 TWh, closer to Morocco's consumption of 29 TWh.

S9i: ($2,816,166) * 10% = $281,616
T15: ($2,001,185) * 10% = $200,189

Total Costs:
S9i fixed costs: $818,715,029 ASICs + $153,099,711 other infrastructure = $971,814,740

T15 fixed costs: $1,482,058,383 ASICs + $326,052,844 other infrastructure = $1,808,111,227

S9i daily variable costs: $2,816,166 electricity + $281,616 misc. = $3,097,782
T15 daily variable costs: $2,001,185 electricity + $200,189 misc. = $2,201,374

51% attack may require at least 10 days of sustained mining, at a minimum, based on the recent Bitcoin Cash hash wars:

S9i 10 days of mining: $3,097,782 * 10 days = $30,977,820
T15 10 days of mining: $2,201,374 * 10 days = $22,013,740

Total cost of S9i attack: $971,814,740 + $30,977,820 = $1,002,792,560
Total cost of T15 attack: $1,808,111,227 + $22,013,740 = $1,830,124,967

Average cost of an attack: ($1,002,792,560 + $1,830,124,967) / 2 = $1,416,458,764

https://cryptoslate.com/analysis-bit...ty-as-morocco/

[dannno]

How many currencies would survive having days or a week of all transactions unwound?

Cost per 1hr attack on the top coins:

https://www.crypto51.app/

All-in, from scratch, cost of taking control of bitcoin a mere $1.4 Billion:



https://cryptoslate.com/analysis-bit...ty-as-morocco/

$1.4 billion, if that is even accurate (I highly doubt it..), seems like a pretty risky maneuver when they could just copy the blockchain over from before the attack was successful and restore everybody. If everybody decided to go back to that chain, it would work just fine.

What would you even gain, let's say in the scenario where nothing happened.. bitcoin would just become worthless.. So great, you destroyed bitcoin, nobody wants to buy them anymore so you lose your money. But then there is the scenario I just mentioned where it can be restored.. again losing your money.. Why risk all that money, and possibly much more?

You would be better off buying $10 million in bitcoin right now and waiting for the next big run.

[idiom]

$1.4 billion, if that is even accurate (I highly doubt it..), seems like a pretty risky maneuver when they could just copy the blockchain over from before the attack was successful and restore everybody. If everybody decided to go back to that chain, it would work just fine.

What would you even gain, let's say in the scenario where nothing happened.. bitcoin would just become worthless.. So great, you destroyed bitcoin, nobody wants to buy them anymore so you lose your money. But then there is the scenario I just mentioned where it can be restored.. again losing your money.. Why risk all that money, and possibly much more?

You would be better off buying $10 million in bitcoin right now and waiting for the next big run.

It can't be restored for the duration of the attack.

There are a number of actors who might want to burn a coin, but most of them are probably happier using it for tracking and honeypots.

[Mordan]

It can't be restored for the duration of the attack.

There are a number of actors who might want to burn a coin, but most of them are probably happier using it for tracking and honeypots.

Bitcoin security is about incentive equilibrium.

It has been working for 10 years and it will continue to work even if butcoiners cry and scream.. Bitcoin moves on and on, impervious to them.

[idiom]

Bitcoin security is about incentive equilibrium.

It has been working for 10 years and it will continue to work even if butcoiners cry and scream.. Bitcoin moves on and on, impervious to them.

For a given value of "working"