Cardano YODA’s recent analysis sheds light on the potential costs associated with a 51% attack on major cryptocurrencies, primarily focusing on Cardano and Bitcoin. The findings indicate a symbiotic relationship between a coin’s price, security, and its underlying technology’s implications.
Almost 23B ADA coins are currently staked. This means an attacker would need 11.5B ADA for a 51% attack. The minimum cost of an attack on Cardano would be roughly $3B.
— Cardano YODA (@JaromirTesar) October 12, 2023
However, buying more than half of the staked $ADA at the current market price is impossible.
As the demand…
A 51% attack isn’t about brute force but control. If a group of miners commands over half of a cryptocurrency network’s mining rate, they can theoretically manipulate the blockchain. In Cardano’s context, with nearly 23 billion ADA coins staked, a malicious actor would need control over 11.5 billion ADA, translating to an estimated $3 billion expenditure.
As the analyst suggests, launching a 51% attack on Bitcoin would set one back by around $6.5 billion, including energy and hardware costs. Interestingly, as Cardano’s price surges, so does its defense against such attacks. However, even if its price multiplies for Bitcoin, its defense against the attack wouldn’t follow the same trajectory. A significant reason is that the cost of the necessary hardware doesn’t scale with Bitcoin’s price. Hardware usually gets cheaper over time due to market competition, innovation, and increased efficiency.
Further, Cardano’s inherent design lends itself an edge. If ADA’s price were to ascend to $1, it would be twice as costly to attack as Bitcoin. As ADA’s price escalates, its defense fortifies. The same can’t be said for Bitcoin, especially with the scheduled halving of rewards every four years. If Bitcoin’s price doesn’t double every halving, its security diminishes.
Consuming over 99% less power than Proof-of-Work systems like Bitcoin, Cardano presents a sustainable future. Per the analyst, PoW’s energy-intensive nature means that, eventually, users might have to shoulder higher fees to maintain security. And if users have greener, cheaper alternatives, Bitcoin might face stiff competition.
Cardano’s approach to security is notable while using ADA coins, a limited and valuable resource, to bolster its decentralization and security measures. This ensures that as Cardano’s market capitalization rises, so does its protection. Notably, today, Cardano stands at a price of $0.245080, with a market cap of over $8.6 billion, ranking 8th on CoinMarketCap. As its adoption grows, so does its fortification against potential threats.
