Is Ethereum at risk of a 51% attack?
Before we get into the issue a 51% attack on a cryptocurrency , we should discuss what exactly is a 51% attack. It is a dreaded attack (thought to be unlikely until recently, though always being possible). It is where one person, group or entity has the majority of hashing power through mining on a cryptocurrency network. Once they have that power they can broadcast false transactions and make people believe they have money that they didn’t receive. Billions could be stolen this way and millions have already been stolen from other currencies due to a 51% attack such as what happened to Bitcoin Gold.
Vitalik Buterin recently declared that such an attack in Ethereum is very unlikely. The concern has arisen again since Bitmain’s E3 miners were released to mine ethash based coins including Ethereum. Unlike the Monero team, the Ethereum team did nothing to stop them. Monero secured their network in my opinion while Ethereum has left it to chance. Now it’s true that networks like Bitcoin and Ethereum are very large and that makes it harder for a single group to take control in theory….
But hold on, Chinese miners had about 60% of hashing power on Bitcoin as of early 2017….
So it could have been possible for Bitcoin.
We can see at the moment that as few as three Ethereum pools could team up and perform such an attack. But Vitalik seems to think of this simple prospect as something being extremely remote.
My perspective is the fact that a few mining pools could team up and pull this off at this moment means mining simply cannot and does not secure a network. How about if we assume there was no collusion, what if hackers take control of these pools and perform a 51% attack? This is leaving a lot to chance.
The only thing I can agree with Vitalik is the fact that Bitmain’s E3 does not seem to be more efficient than GPU mining.
However regardless of the above wouldn’t it be naive to believe its inconceivable that hackers or well funded organizations wouldn’t invest time and money in such an attack? After all, this is billions of dollars at risk.
What do you think? Is it likely? Is even that off 5% too much chance?