A finance professor at Duke University published a paper arguing that the market has significantly underestimated the threat of a “51% attack” on Bitcoin. An attacker could gain control of the Bitcoin network within a week by purchasing hardware worth $4.6 billion, investing $1.34 billion to build data centers, and incurring weekly electricity costs of approximately $130 million. Critics argue that accumulating and deploying mining equipment would take years, and short selling requires substantial collateral; furthermore, exchanges might suspend suspicious transactions.
The latest research shows that the threat of a “51% attack” on Bitcoin is severely underestimated by the market, with attackers needing only about USD 6 billion to destroy Bitcoin.
On October 9, Campbell Harvey, a finance professor at Duke University, warned in his latest research that although both Bitcoin and gold are regarded as favorites in the “currency devaluation trade,” the risks faced by Bitcoin far exceed those of gold.
By purchasing hardware equipment worth USD 4.6 billion, investing USD 1.34 billion in building data centers, and adding weekly electricity costs of approximately USD 130 million, attackers could gain control of the Bitcoin network within a week.
(Bitcoin’s overnight rebound failed, dropping about 3.3% from its daily high.)
Through the derivatives market, attackers could short Bitcoin and reap enormous profits when its price plummets, sufficient to cover the cost of the attack. Harvey emphasized:
You can destroy Bitcoin’s value with USD 6 billion. Although such an attack may sound overly technical, it is highly credible.
Matt Prusak, president of a U.S.-based Bitcoin company, argued that these concerns are exaggerated. Accumulating and deploying mining equipment would take years, and shorting would require substantial collateral; exchanges might also suspend suspicious transactions.
51% Attack: A Fundamental Threat to Bitcoin
A 51% attack refers to a situation where a single entity controls more than half of the computational power in a blockchain network.
Once successful, the attacker can alter the ledger, forge transactions, and even conduct “double-spending attacks”—where the same digital token is used multiple times. In contrast, gold does not face similar systemic risks.
Moreover, the current prosperity of the Bitcoin derivatives market provides economic incentives for a 51% attack.
Harvey’s paper points out that traders can establish short positions with less than 10% of the daily trading volume to gain substantial profits, which would be sufficient to cover the cost of the attack.
This profit mechanism significantly increases the economic feasibility of such an attack, especially considering that the cost of the attack accounts for only 0.26% of the total value of the Bitcoin network, far lower than many investors’ expectations. Harvey emphasized:
The low cost of an attack poses a serious issue for Bitcoin’s future viability and security.
Harvey further noted that such attacks are likely to occur overseas, as many regions lack effective measures to prevent market manipulation.
The industry remains divided over the risk of attacks.
Despite Harvey’s stern warning, differing opinions exist within the industry.
Prusak argues that economic feasibility alone is insufficient to support the theory of a 51% attack, pointing out:
It would take years to accumulate and deploy sufficient mining equipment, which is not feasible in practice.
Prusak also emphasized that shorting Bitcoin requires substantial collateral, and if exchanges suspect manipulation, they may suspend trading, preventing attackers from cashing out their gains.
Other blockchains have indeed previously survived 51% attacks.
Bitcoin forks like Bitcoin Gold and Ethereum Classic have been attacked, but they are smaller blockchains with lower miner support, making them more vulnerable to manipulation.