On May 21, the Financial Stability and Development Committee of the State Council held its 51st meeting and pointed out that “strengthen the supervision of platform enterprises’ financial activities, crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social sector”. Since then, previous speculations such as “Bitcoin mining will be banned” have been confirmed one after another. On June 11, Qinghai and other places issued a document to rectify Bitcoin mining, and some miners said that their Yunnan mines had been shut down; in the early morning of June 20, a number of Bitcoin mines in Sichuan collectively cut off power, marking the end of an era .
As the main provider of Bitcoin computing power, China has cleared and withdrawn mines in many places. The computing power of the entire network is nearly cut. According to the data of Glassnode, on June 27, Bitcoin’s network computing power fell to 61EH/s yesterday, which has returned to the level before the mining disaster at the end of the year. On July 3, the average computing power of the entire network rebounded to 97EH/s, and the computing power of the top ten mining pools all increased, but based on the data two months ago (the computing power of the entire network was about 184EH/s on May 4) It’s still a far cry.
Bitcoin’s entire network computing power (orange line is computing power, gray line is price)
The sharp decline in the computing power of the entire network has not only attracted the attention of mining practitioners, but also brought risks to coin holders, such as 51% attacks. At this time, if a node has more than 51% of the computing power of the entire network, it will be able to achieve double payment, cancel transactions and other operations. This situation is almost impossible in the Bitcoin network, because after weighing the cost and benefits of the attack, the attackers will find that the gains outweigh the losses (thanks to Satoshi Nakamoto for the design in the white paper). However, for currencies that also use the POW mechanism and the entire network’s computing power is smaller, you need to focus on this risk.
In August 2020, ETC suffered two 51% computing power attacks in succession, and its price fell to around $6. Some mainstream exchanges even wanted to remove ETC, which is a lesson for the past. Fortunately, ETC learned the lesson and launched a MESS program against 51% attacks a month later, and the market value also picked up soon.
The reason why 51% of the computing power of the entire network can be quickly obtained is also inseparable from the “favorable conditions” created for attackers after the mining industry matures:
Since the POW mechanism relies on a large number of hardware and energy drivers, in order to lower the entry barrier for miners, the role of computing power leasers and mining pools that control most computing power has gradually appeared in the industry. Once the large computing power leasers lack guard against demanders, Or the collusion of interests of several parties can easily give a single node a short-term opportunity to obtain more than 51% of the computing power.
Interestingly, the website Crypto51 specifically counts the cost of 51% attacks against different digital currencies in 1 hour. (The calculation method is: estimate the cost of renting the current one hour of network computing power according to the hash table based on different algorithms listed on the computing power rental website NiceHash. The attack cost does not include the miner’s block reward. Website data source: Hash rate-What to Mine; real-time currency price-CoinMarketCap; hashrate rental price-NiceHash.)
According to the current information, the following small currencies can be attacked (ranked by market value) at a cost of less than one hundred dollars:
The above is only the theoretical value of the website. The presentation of the data is not to encourage or help complete the attack, but to let the project team pay attention to such risks and let people talk about the potential problems and solutions of decentralization. The founder of Ethereum, Vitalik, considered energy consumption and security issues, and also believed that switching from PoW to PoS was the right choice. Although the PoS mechanism has more or less problems such as wealth concentration, PoS is better than PoW in terms of security.
With the tightening of policies in the past two months, a large number of domestic mines have been retired or transferred. While discussing industry phenomena, both project parties and currency holders should pay attention to the currency security issues caused by them.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/after-a-sharp-drop-in-computing-power-100-can-capture-these-small-currencies/
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