51% Attack Preventable?

[exahash]

*This really applies to any CPU-friendly chain, I'm picking on LTC because its what I've been experimenting with.

As a result of the discussion in Pooler's LTC cpu miner thread I started thinking about how hard and expensive (or easy and cheap) it would be to pull off a 51% attack... and I now think it's pretty easy and cheap.

I ran Pooler's miner on Amazon EC2's highest CPU instance (cc2.8xlarge) and averaged 85 kh/s.  The spot price for that instance was $.54/hr.  The entire LTC network is under 18 Mh/s right now (yesterday it was almost 30 MH/s - maybe it was already attacked). 

An attacker would need to little more than double the network - let's say add 19 Mh/s right now, which would require 224 of those instances at a total cost of $121 per hour (about 20k LTC at the current btc-e exchange rate).  Many more than 224 instances are available if needed - Amazon mentions how 1064 of these instances were used to rank #42 on a Top 500 supercomputer list.

The only thing I can think of that makes this unfeasible is that the exchange rate for LTC is so low, it's just not attractive to anyone with the know-how to pull it off.  The attacker would of course need doctored software and a fair bit of planning to let him double-spend his coin, and sufficient demand at an exchange to let him cash out.


This raises the question of how to defend against such an attack...

Keeping the exchange rate low would work short term, but would most likely hurt adoption in the long run.

Promoting adoption could spike the exchange rate and make the attack more attractive.

Promoting more mining among separate individuals, and pooled mining at that (for transparency) would seem to be the only truly viable option.  Of course new miners mean less profit for (currently unprofitable) existing miners, but with enough mining the network/currency could support a higher exchange rate, making it profitable for all miners.


So... how do we actively recruit new miners?

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So... how do we actively recruit new miners?

If I had to pick only one option, that would be by stopping making a mess such as tens of coins, merged mining confusion and such. Keep it simple and neat. In its current state, even to computer-aware people BTC looks fishy (not stating my opinion there, just reporting some opinions I got from people who were introduced to the software on some forums like half a year ago). I leave up to your imagination what they could think of R0xorCoin-SupaBrix merged mining...

[kjlimo]

These are the reasons I'm amazed that exchanges exist for these coins.  We're going on a little bit of faith that no harm is being done for these early fragile coins.

[ThiagoCMC]

These are the reasons I'm amazed that exchanges exist for these coins.  We're going on a little bit of faith that no harm is being done for these early fragile coins.

That is true... So, the cryptocurrencies needs a lot of investment on its early days, from miners, and a lot of development for merchants and for regular people...

I think that a new cryptocurrency like Litecoin should mature a lot, before its release. For example, online stores already open just waiting for the coin, exchanges, auction sites and a lot, a lot of marketing BEFORE the release. So, a lot of miners will wait for it a relative long time before start its works... Sounds nonviable but, how to have a huge crew of miners at the beginning!?

The Bitcoin already pass that phase... I do not fear a 51% attack in Bitcoin but now, I see that Litecoin is too vulnerable... Even when there is some bad guys like CoinHunter making threats of attack and telling lies and encouraging bad things.

Cheers,
Thiago