Altcoins News
By Steven Anderson
1 / 15
For those who missed the clarification, here is the thread by Charlie Lee on Merged mining and 51% Attack in Charlie Lee’s Own Words:
2 / 15
Since, so many people have asked me if this is an issue, I figure I should respond to this and clear up any misunderstanding of how merged mining works and how it affects 51%…
3 / 15
First, let me explain how security works in a POW cryptocurrency. Miners have an upfront cost (cost of hardware like ASICs/GPUs) and an incremental cost (cost of…
4 / 15
On the flip side, we have attackers. In order to 51% attack a coin, they need to have 51% or close to 51% of the network hashrate and they need to mine the coin for some time to…
5 / 15
How much time the attacker needs to mine depends on how long it takes for their victim to trust a transaction to be confirmed.
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This incremental costs can be calculated by calculating the electricity costs to run 51% of the mining hashrate for 30 minutes.
7 / 15
But it's not actually this cheap to attack Litecoin. There's also the upfront cost that I first mentioned.
8 / 15
Depending on which miner (A6+ or L3++) you can find, total costs is between $133M to $151M. This is of course assuming you are even able to find and buy that many ASIC miners.
9 / 15
For this attack to be profitable, the attacker will have to make enough money to cover the costs of the attack: $150M upfront + $15k incremental.
10 / 15
He will also need tens or hundreds of millions of dollars worth of LTC to perform this attack because he has to deposit these LTC to exchanges and double spend them.
11 / 15
This attack is theoretically possible but not practically possible. Satoshi designed this system such it makes more sense for miners to be honest and mine the coin normally,…
12 / 15
There's also another way to get the hashrate needed to attack. That is to rent the hashrate. This is what the NiceHash-able percent refers to. Litecoin is 6% NiceHash-able.
13 / 15
Whereas, Bitcoin Cash (33% NH-able) and BitcoinSV (40% NH-able) are much easier to 51% attack.
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Litecoin is Scrypt-dominant and that is one of the reasons why Dogecoin switched to merged mining (AuxPoW) with Litecoin in 2014.
15 / 15
So how does the recent increase in Dogecoin marketcap and liquidity affect this 51% attack scenario? The simple answer is that it doesn't at all.
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