Switching Bitcoin to 100% ASIC mining could increase security by 2,000X

 

Widespread adoption of the Bitcoin Application Specific Integrated Circuit (ASIC) could increase the cost of a 51% attack by a factor of up to 2,000.

Rod Garratt of the University of California at Santa Barbara presented the research he co-authored with Maarten van Oordt of the Bank of Canada at the Unitize conference on July 10.

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He examined the variable costs of a 51% attack on the Bitcoin network based on the type of computer used to secure the network. Research suggests that only by changing the network to 100% ASIC mining, can current security be greatly improved.

The main reason is that ASIC miners have little use and little value outside of Bitcoin mining, and an attacker couldn’t make much profit from selling the equipment used in an attack. Consequently, to conduct a profitable attack, they would have to spend twice as much as a large volume of coins, which is more expensive and difficult to do.

The investigation estimated that for an attack after the next halving to be profitable, between 157,000 and 530,000 BTC would be needed in case of 100% ASIC extraction.

What is a 51% attack?

A 51% attack is when a malicious agent seeks to manipulate a blockchain network by controlling 51% of the mining power (this is the minimum necessary to accept new blocks). The attacker then creates an alternative blockchain to the „real“ blockchain, and makes a transfer to the rest of the network to accept the new tampered blockchain as the correct one.

The most common use case for this style of attack is to spend the same coins twice, which is commonly known as a double spend.

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Bitcoin Security Concerns

Some in the Bitcoin community oppose the ASIC miners, which in 2017 caused a hard bifurcation, resulting in the creation of ASIC-resistant Bitcoin Gold. Garratt said this is why Bitcoin Era Gold has had several successful attacks of 51%, resulting in a double spending of $18 million in coins, while Bitcoin has yet to receive its first successful attack. However, it’s much more expensive to attack Bitcoin, which is also a major factor.

Some Bitcoin Network participants are concerned about the long-term security of the blockchain network, as block rewards are replaced by transaction fees, he explained, leaving miners counting transaction fees as a reward.

The potential danger is that, since the miners depend on transaction fees, they will react to large price fluctuations by closing down their miners, making it more profitable to carry out an attack on the network.

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Garratt mentions another safety benefit of using ASIC machines, which is that miners are much less likely to shut down their equipment as a result of price fluctuations, increasing the strength of the network against these situations.