Exactly two weeks later, on April 1, opponents of the implementation of the EIP-1559 protocol on the Ethereum blockchain are likely to carry out a 51% attack. What caused such a reaction from miners, what is the likelihood that they will succeed in attacking the network, as well as how users should behave. We will tell you in the article.
From the article, you will learn
- In short: what is Attack 51 and how it will work.
- To believe, or not, threats?
- Why is the attack on the network planned?
- What are developers doing to prevent a network crash?
- Preparing for an attack: what users need to do on their own.
Attack 51. What will happen?
Miners are the driving force behind blockchain creation. Each register contains information about all previously conducted transactions. You can’t change it, that’s the beauty of decentralization. It is the miners who create blocks, confirm transactions and add them to the chain. This is, of course, rewarded with the respective cryptocurrency in fees.
Miners plan to gain more than 50% control of the Ethereum blockchain to independently make decisions about changes in the network. This can be done by increasing the hash rate they control. At the moment, miners control about 30%.
Ethereum Attack 51 is likely to have such a scenario. The protesters, let’s call them that, will unite their miners, thus “growing” the hashing power, and will receive a conditional controlling stake. Thanks to this, they will be able to change the course of transactions, exclude requested blocks or add new blocks to the chain. At the same time, having more power, they will be able to create longer chains, and the network will perceive them as the original. As a result, for fraudsters – earnings on operations, which they can replace and control.
Believe it or not?
Miners already have a big impact on the network. Moreover, over the past year, their activity has increased significantly. Probably, it is precisely due to the growth of the measure of profit of MEV (you can read more about what it is in the Paradigm Research study “MEV and Me”). A measure that the community also refers to as “selfish mining strategies”. Therefore, there are still risks.
On the other hand, to implement their plans, miners will need to unite in a pool. But most, for example, Chinese crypto-miners refuse to join the actions of the “protesters”.
“Regarding the 51% Attack of Ethereum Miners on April 1: WuBlockchain surveyed the Chinese miner community, and 71% said they would not support these actions. Many people think that this is just an April Fools’ joke, ”he writes on his Twitter page.
Here it is important to refer to the following data: China is the country with the highest concentration of mining pools. To be sure, about a quarter of the largest money corporations are concentrated on the territory of this state. Accordingly, if the majority in the community is not ready to support the 51% Attack, the conclusion suggests itself.
But this fact must also be taken into account: according to the site, which was organized by the protesters against the Ethereum EIP-1559 update, the number of pools in support is greater than those against. Namely 12 – 8.
Why the attack is planned?
Ethereum developers have announced that the EIP-1559 protocol will be implemented during the London hard fork. Which, to put it mildly was received with hostility by the community. It’s about miners.
Why? This update means that when paying for transactions, in the process of generating ETH, a part of the commissions will be burned.
More precisely, the transaction fees will be split in half. The first is set by the protocol (basic), the second is a tip. This tip is set directly by the market. In this case, the base will be burned, and the miners will only have a tip. I emphasize that the size of which cannot be determined in advance.
As a result, today the picture is as follows: two camps were organized from those supporting and not supporting this update. Several factors speak in favor of the implementation of the developers’ idea.
- implementation solves the exogenous crisis of “hyping” NFT;
- reducing miners’ fees will also reduce the hash rate, thus reducing the amount of energy consumed by the Ethereum network;
- for sure there is no certainty that miners’ revenues will decrease. Researchers suggest that only 20% of miners’ current earnings could be burned;
- potentially, the implementation of EIP-1559 could, on the contrary, positively affect the pricing of ETH, as there will be a decrease in the number of coins in circulation and the associated denomination;
- EIP-1559 will resolve the issue of overpaying for network security.
Network crash. How Buterin protects Ethereum?
In anticipation of Attack 51, Ethereum co-founder Vitaly Buterin began to take defensive actions. Eliminating the blockchain vulnerability is on the agenda.
So, the launch of Ethereum 2.0 is planned earlier than it was planned. That is the transition of the network from the Proof of Work (PoW) protection protocol to the more advanced Proof of Stake (PoS).
To make the merge faster, the ethpow or beacon clients will be slightly modified, as follows from the document posted by the developers. The team expects that enabling ethpow will help protect chains by creating blocks with totalDifficulty> = transition TOTAL difficulty. And the presence of at least one honest miner in the network can already be regarded as protection.
How to protect yourself?
As reported by the leading profile media, the group planning the attack does not intend to harm but aims to show force. That is, to prove that such an attack is possible and viable. The second epithet, of course, suggests that some action on their part will still be taken.
Given the previous section, there are probably only two ways out. The first is to connect to a network of ether miners who are ready to support the developers. The second is to disconnect from the network and withdraw all your assets on the air.
We remind you that this text has only an informative purpose. CoinRabbit does not provide any financial advice.