Litecoin founder Charlie Lee has taken to Twitter to address community concerns regarding the Litecoin network sparked by a cryptocurrency security site that tracks the cost of launching a 51% attack against proof of work cryptocurrencies.
Crypto51 tracks the cost of executing a 51% attack against a number of proof of work cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Monero, and Dash. The site, launched recently, catalyzed a wave of concern within the cryptocurrency due to the relatively low cost of attack execution — a one hour attack targeting the Litecoin network could theoretically cost as little as $61,000.
The threat of a 51% attack targeting the Litecoin network, according to Lee, is relatively low — Lee highlights the strong distribution of pools, the high capital cost of a potential attack, and the rapidly increasing Litecoin hashrate:
In lite of recent 51% attacks and https://t.co/yfy2GcBfQE info, rest assured that the Litecoin is extremely secure and mining is very healthy. 👍🚀
– Pools are well distributed (largest 22%)
– Hashrate up 50x (past 1 year)
– High capital costs to attack ($322-761MM + ~$38-50k/hr) pic.twitter.com/hD8IrYM8dD
— Charlie Lee [LTC⚡] (@SatoshiLite) May 30, 2018
51% Attack Threat Rises
The threat of 51% attacks on proof of work cryptocurrency networks has increased dramatically subsequent to the availability of rentable hashing power — platforms such as NiceHash now make it possible to hire out hashing power and execute attacks in far less time and with less planning.
Crypto51 tracks the cost of a 51% attack for one hour, which in most cases is enough time to confirm six or more blocks. For a typical proof of work cryptocurrency, this time frame could potentially be sufficient to execute double spend transactions and then deposit tokens at an exchange.
While 51% attacks are uncommon and can be identified relatively easily, they are becoming more frequent.
A recent 51% attack on the Bitcoin Gold network resulted in the successful execution of double spends that resulted in the generation of more than $18 million. The Bitcoin Gold team stated that while there was no risk to typical users, platforms that accept large payments of cryptocurrency are most at risk:
“A party like an Exchange may accept large deposits automatically, allow the user to trade into a different coin quickly, and then withdraw automatically … Until now, some Exchanges were operating with less than five confirmations required. We have been urging higher limits to prevent such an attack, and urging manual review of large deposits of BTG before clearing the funds for trading.”
More recently, controversial privacy-focused cryptocurrency Verge was hit with a 51% attack — the third to target the Verge blockchain since April. The two previous attacks captured over $1 million and $1.8 million respectively.
Proof of Work Cryptocurrencies Prepare for Future Attacks
The relative ease with which 51% attacks can now be executed has prompted many PoW token development teams to implement new measures to prevent future attacks. Exchanges such as Binance have begun to increased the number of confirmations required to deposit tokens, which theoretically increases the likelihood of a 51% attack being detected.
Charlie Lee, however, doesn’t appear to be concerned about a potential 51% attack targeting the Litecoin network, stating that miners are unlikely to attack Litecoin and act against their rational self-interests:
Litecoin is 99% dominant in Scrypt PoW. LTC has network hashrate of 301 TH/s. The next largest non-merged-mined Scrypt coin (GAME) only has 2 TH/s. Takes less than 1% of the LTC network to 51% attack other Scypt coins. But miners won’t attack Litecoin and kill their cash chikun. pic.twitter.com/kj6r7d9KBr
— Charlie Lee [LTC⚡] (@SatoshiLite) May 24, 2018
Litecoin, currently ranked #6 by market cap, is down 1.33% over the past 24 hours. LTC has a market cap of $6.79B with a 24 hour volume of $303.58M.
Chart by CryptoCompare
Cover Photo by MILKOVÍ on Unsplash
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