The Pow vs PoS debate is more alive than before

about 4 years ago

51% Attack in Bitcoin Gold (BTG)

This new attack on a small crypto with PoW has caused a great debate within the crypto ecosystem.

BTG suffered a 51% attack a few days ago, which resulted in more than 7,000 Bitcoin Gold, or $ 73,000, being victims of what is known as Double Spent.

According to a GitHub post by James Lovejoy, a researcher at MIT, the altcoin emerged from the Bitcoin hard fork (BTC) was attacked by 2 "reorganizers"; which changed the content of more than 10 blocks between January 23 and 24.

In the first attack on January 23 of this year, a total of 14 direct blocks were removed from the Blockchain and then another 13 were added. With a total of 1,900 BTG for a total of approximately $ 19,000, these were also "Double Spending" 2 times in one transaction.

On January 24, another attacker removed 15 blocks, and added 16, for a total of 5,268 BTG, or $ 53,000 in 3 different transactions.

It is worth noting that BTG is a very small crypto, it barely has 200 million dollars of market capitalization, vs 172 billion BTC. And according to Chainalisys data, the price of the attack was only $ 1,700. Necessary to overcome the computing power of 51% of network miners.

Defects in Proof of Work

One of its less commented defects is the legal ambiguity that exists on these attacks.

While obtaining force control of 51% of the computing power of a Blockchain network is seen within our cryptoverse as atrocious; The act itself is not an illegality. For possessing computing power does not violate any traditional law.

According to the American lawyer specialized in crypto regulation, Josh Lawler:

There is no legal definition for a 51% attack. Although US law recognizes Double Spend as a robbery, attacks of this type within a Blockchain remain unexplored territory, said Josh Lawler.

In addition to this serious problem, these cryptocurrencies with the PoW consensus method have centralization problems. Since the majority of mining hardwares manufacturers are Chinese, some estimates have shown that up to 65 percent of all Bitcoin mining in 2019 came from China.

The centralization of the mining power of BTC has been one of the most debated problems in the cryptoverse. But, the fact that a 51% attack on the world's largest crypto would cost the staggering $ 1.4 billion seems to have reassured much of the industry. Well, this issue is not even taken into consideration in most cases.

The figure to gain the necessary computing power for other altcoins is considerably lower. For example, to get the majority of the Bitcoin Cash (BCH) Hash Rate, only $ 72,000, or Lightning Network $ 65,000, or an attack on Ethereum Classic $ 15,000 is needed.

Mass migration to PoS

Because not many cryptos can keep up with Bitcoin or Ethereum; There has been a massive migration to a "new" consensus method called Proof of Stack in recent years.

This fits more with the realities of most cryptocurrencies. Which do not have an ecosystem of miners so wide and strengthened that any 51% attack is financially unfeasible. We have already seen that the attack on BTG cost only 1,700%.

The world of PoS is dominated by Cardano's successful “Ouroboros” algorithm, which has put pressure on those crypto projects that don't want to abandon the original PoW.

Even the very Ethereum Foundation is moving, very slowly the road to migration to PoS. Is it the end of the PoW?

If this article seems informative, Leave a positive vote and resteem, this will not help much, Thanks for stopping by