Fundamentals of Proof of Work: 2019 is the year of the 51% attack
It's a blog from David Vorick who is the CEO, Cofounder and Core Developer of Sia which is oneof the first crypto projects I got into and he writes this very intelligent analysis on PoW coins that most people in the crypto-sphere wouldn't even want to discuss.
There are two primary categories of cryptocurrencies with shared hardware. The first and most prominent category covers the ASIC resistant cryptocurrencies. ASIC resistant cryptocurrencies actually have a goal of using shared hardware; the belief is that security is increased because more widely available hardware will lead to greater hashrate decentralization. The second category of shared hardware cryptocurrencies is cryptocurrencies that are ASIC mined but share the same algorithm as some other cryptocurrency. When multiple cryptocurrencies share the same proof of work algorithm, the same hardware (even if that hardware is specialized) is able to target any of the cryptocurrencies and this disrupts the incentive compatibility in many of the same ways that ASIC resistance does.
One of the key developments in enabling recent attacks has been the maturing of hashrate marketplaces. For shared hardware cryptocurrencies, knowing the most profitable cryptocurrency to mine at any particular moment requires a high degree of sophistication. Hashrate marketplaces allow hardware owners to rent their hardware out to more sophisticated miners, increasing the profits of all participants in the hashrate marketplace.
This is a trend that is going to continue. Today we are seeing 51% attacks because they are the lowest hanging fruit with the highest payoff. However many of the major popular dapps today have fundamental weaknesses, and as they grow in value and as attackers grow in sophistication, those fundamental weaknesses are going to increasingly be exploited. In particular, I have concerns for most of the cryptocurrency projects involving (in order of concern): novel consensus algorithms, on-chain governance, oracles, stablecoins, prediction markets — among other things. It’s often not the core ideas themselves that are broken, but rather the specific designs and implementations.
That last bit is very important IMO. It is easy to follow a fad or even a new piece of tech. But these thing could be full of vulnerabilities. Medicine is tested for years before going into the market. We don't have that with blockchain. Things happen very fast. Sometimes that's a great thing. But when it comes to battel testing something, it's not that good.
The GPU marketplace is getting hit by a second big impact: there are now ASICs available for both Ethereum and Zcash. These two cryptocurrencies were previously driving most of the GPU hashrate, and that hashrate is slowly being pushed out by ASICs, which dramatically reduces the cost of renting GPUs to attack the lower value cryptocurrencies.
Although this is sometimes effective, attackers will be increasingly able to get around this security measure. Whether it is by using privacy coins, or whether it’s by delaying the actual double spend until the stolen cryptocurrency has been moved to a wider set of wallets, or whether it’s by using decentralized exchanges instead of centralized exchanges to extract value, address blacklisting will get increasingly ineffective as attackers get more sophisticated.
On the bright side we have the upcoming hybrid system from Dash (Chain Locks) which use the masternode network to lock the chain from being 51% attacked. There wo't be any attacks because people could rent some Hashpower. Chain Locks would require an attacker to own at least 51% of the masternode network too.
Use This Website To Check 51% Attack Cost For Various Coins
Source of shared Link
