Ethereum's Proof-of-Stake Design May Offer It a Stronger Defense Against Attacks Than Bitcoin's Proof-of-Work System

Ethereum's proof-of-stake design may offer it a stronger defense against attacks than Bitcoin's proof-of-work system, according to recent insights from leading researchers in the crypto space.

output: Ethereum's transition to a proof-of-stake system may have left it with a stronger defense against attacks than Bitcoin's proof-of-work system, despite the flagship cryptocurrency's purportedly higher levels of decentralization, according to recent insights from leading researchers in the crypto space.

At present, an analysis by Justin Drake, a prominent researcher at Ethereum Foundation, has illuminated the varying costs associated with launching a so-called 51% attack on the two largest blockchains.

According to Drake's calculations, compromising Bitcoin's blockchain would require an estimated $10 billion, while a similar disruption of Ethereum would cost roughly $45 billion, factoring in the cost of acquiring a majority of the staked ETH.

However, this figure could be as low as $15 billion if an attacker were to seize control of the largest staking pools. At present, there are 300 large staking pools, each securing around 32 ETH, in addition to the vast number of smaller stakers.

This difference in attack costs, Drake suggests, gives Ethereum a superior long-term security posture, especially as staking volume grows.

Grant Hummer, co-founder of blockchain startup Etherealize, also touched upon the issue, noting that Bitcoin's security budget is diminishing, rendering it more vulnerable as block rewards decline and the cost of hardware increases.

"Right now, the cost to attack Bitcoin is about $10 billion, but as the total node count increases, and as the cost of hardware rises, it will become more difficult to launch such an attack," Hummer said.

"However, with the halvings, the rate at which new coins are released declines, and at present, about 65% of Bitcoin's hashrate is covered by a small number of large mining pools."

He projected that over the next decade, the cost of attacking the Bitcoin network could drop to as low as $2 billion- making such a breach far more feasible for a well-funded adversary.

In contrast, Hummer asserted that Ethereum's more robust economic model and validator infrastructure pose greater challenges for attackers.

"In the case of Ethereum, due to the high level of validator participation and the large capital they contribute, the cost of a 51% attack on Ethereum would be significantly higher- around $45 billion," Hummer added.

"Moreover, due to the decentralized nature of the validator set, it would be an incredibly complex endeavor, requiring an attacker to acquire a majority of the staked ETH."

Hummer further argued that Ethereum is better positioned to serve as a decentralized store of value on the internet, thanks to its expanding validator set and high stake-backed security.

"Despite having fewer users than Bitcoin, Ethereum is displaying greater promise in this domain due to the robust capital backing its validators and the collective efforts of the researchers and developers working tirelessly to maintain the network's integrity."

As concerns grow online around Bitcoin's long-term sustainability without rising transaction fees, Ethereum advocates assert that staking-based consensus is better suited to handle future network demands without compromising resilience.