If Bitcoin Mining is Done Entirely on ASICs, It Could Increase Security 2,000X
If Bitcoin Mining is Done 100% on ASICs, It Could Increase Security 2,000X
The wholesale embrace of Application-Specific Integrated Circuits (ASICs) mining for Bitcoin (BTC) could increase the cost of a 51% attack by a factor of up to 2,000.
Rod Garratt from University of California Santa Barbara presented the research he co-authored with Maarten van Oordt from the Bank of Canada at the Unitize conference which took place on July 10.
It analyzed the varying costs of a 51% attack on the Bitcoin network based on the type of equipment used to secure the network. The research suggests by just switching the network 100% ASIC miners security can be increased greatly.
The main reason is because ASIC miners have little use, and little value, outside of Bitcoin mining and an attacker would not be able to get much of a return form the sale of equipment used in an attack. This way, in order to conduct a profitable attack, they would need to double spend a much higher number of coins, which is more costly and hard to do.
The research found that for an attack occurring after the next halving to be profitable, it would require between 157,000 — 530,000 Bitcoin if 100% ASIC mining was in place.
What is a 51% attack?
A 51% attack is when a malicious participant attempts to manipulate a blockchain network by controlling 51% of the mining power (this is the minimum needed to accept new blocks). The attacker then builds an alternate chain of blocks to the “real” chain, and transitions the rest of the network to accept the new, manipulated chain as the correct one.
The most common use-case for this style of attack is to spend the same coins twice, usually called double-spend.
Concerns over Bitcoin’s security
Some in the Bitcoin community are adverse to ASIC miners, which caused a hard fork in 2017 which resulted in ASIC-resistant Bitcoin Gold being created. Garratt said this was why Bitcoin Gold had several successful 51% attacks resulting in the double-spend of $18 million in coins, while Bitcoin is yet to receive its first successful attack. However, it is far more expensive to attack Bitcoin, which is also an important factor.
Some Bitcoin network participants are concerned over the long term security of the blockchain network as block rewards are replaced with transaction fees, he said, which leaves miners relying on transaction fees as their rewards.
The potential threat is that once miners are relying on transaction fees, they will react to significant price fluctuations by turning off their miners, making it more cost effective to perform an attack on the network.
Garratt mentions another security benefit from using ASIC miners is that miners are much less likely to switch off their equipment due to price fluctuationa, increasing the strength of the network against price fluctuations.
