51% Attack

The environmental impact of Ethereum’s transition to proof-of-stake has been much highlighted, but less so how the Merge alleviates “51% attacks” and provides other security benefits. A 51% attack happens when actors take over the consensus mechanism of a public blockchain, i.e. controlling more than 50% of the mining hash rate (proof-of-work) or a majority of staked tokens (proof-of-stake) to further their own aims.

One actor being able to manipulate a public blockchain is contrary to the concept of decentralisation and would likely mean less trust in that chain. Even if an attack happens, it is almost impossible to alter the history of the blockchain. However, transactions can be censored or stopped, allowing double-spending. For the most significant proof-of-work blockchain, Bitcoin, an attacker would need to spend several billions to complete a 51% attack (including buying miners and operating them). Theoretically, a group of existing miners could work together to complete an attack.

After the Merge, you need circa $10bn ETH (ETH price of $1,350 and 14.4m ETH staked) to complete an attack on Ethereum. The price of ETH is likely to increase as an attack progresses, meaning that it gets more and more expensive. Other security features make attacks unlikely, e.g. slashing and validators voting to restore the “original” chain. A 51% attack is a genuine concern, but a major public blockchain has not been compromised in this way. However, blockchains like Ethereum Classic have suffered 51% attacks in the past.

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