<div dir="ltr"><div><div>Nifty little tool showing the estimated cost of controlling the majority of the Bitcoin network:<br><br><a href="https://www.resallex.com/bitcoin/brix">https://www.resallex.com/bitcoin/brix</a><br>
<br></div>Would love to see something similar for the Tor network - my guess is that the cost there is probably at least an order-of-magnitude lower, but that's just my intuition.<br><br></div><div>R<br></div><div><br>
</div>From the site..<br><div><blockquote style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex" class="gmail_quote"><h4>
Introduction
</h4>
<p>
<b>Equilibrium 51% Attack Cost:</b>
This is a metric attempting to calculate the total present value cost
required to attack the Bitcoin network through majority hashing power
(51% attack).
The metric is meant to be viewed
as a snapshot in time as if an attacker decided to invest in attacking
the network under the current conditions.
<br>
<b>BRIX Score:</b> "Bitcoin
Robustness Index" - The relative rank of Bitcoin's 51% attack cost
compared to annual military expenditures among all nations.
</p><h4>
Method
</h4>
This metric is, in essence,
equal to 51% of the present value ("PV") of all future revenues derived
from bitcoin mining using current Mt. Gox prices.
Revenues include both block
rewards and transaction fees. The purpose behind using PV as a measuring
tool is to approximate the incentives to miners to build upon the
Bitcoin network.
The measure can be viewed as an
aggregate of all the cost-benefit analyses done by individual miners.
We believe this is superior to
other methods of calculating the attack cost, including variables such
as current hash rates and current capital costs, because the model is
independent of technology advancements.
Under the equilibrium model,
miners will continue to invest in equipment until they reach the point
where marginal cost equals marginal revenue (the point of profit
maximization).
Under perfect competition (of
which bitcoin mining is effectively), this point will also be where
aggregate cost equals aggregate revenue.
If we assume the variables that
can affect mining revenue are held constant ($/btc & transaction
fees), then it is easy to calculate aggregate revenue and therefore also
aggregate cost.
Since we know aggregate revenue
equals aggregate cost, by calculating 51% of aggregate revenue we
effectively calculate 51% of the aggregate cost to miners.<br><br><img src="http://4.bp.blogspot.com/_D-dkm0XzHGc/SbPTNodESOI/AAAAAAAAA8k/s9qV0n8oO1A/s320/Economics_Perfect_competition.png">
<br>
We calculated this metric by
discounting each block reward (210,000 blocks) as if it were an annuity
and then discounting it further to its present value. Then, we added
estimated transaction fees based off historical records.<br>
<img src="http://i.investopedia.com/inv/articles/site/mutualfund/101503_7.gif">
<h4>
Assumptions
</h4>
<p>
This metric is meant to
represent a model at equilibrium. Therefore it represents a snapshot of
51% of the incentive to miners at the current price and current
transaction fee levels.
The idea is that miners are
willing to invest in the network as long as it is profitable to continue
doing so. We assume the following:
</p><ul style="text-align:left"><li>
<b>
Rational Actors:
</b>
We assume all mining
participants are rational actors and strictly pursue profit
maximization. We ignore all other motivations, including political,
emotional, and reputational. All other heuristics and biases are
ignored.
</li><li>
<b>
Static Variables:
</b>
We assume that the variables
in the model are static, and therefore represent a 'snapshot in time'.
There are no growth forecasts for either price or transaction fees.
</li><li>
<b>
Perfect Competition:
</b>
We assume that all miners
and potential attackers have access to the same technology, resources,
and information. There is no technological advantage for any party that
would exclusively decrease mining costs or otherwise acquire mining
equipment faster.
</li><li>
<b>
Discount Rate: 8%
</b>
Our model discounts future cash flows by 8%.
</li></ul></blockquote><br></div></div>