Ethereum is increasingly vulnerable to attacks, with hashrate falling more than 42% from its all-time high

Computing power is an important indicator of the healthy operation of the Proof of Work (PoW) blockchain. This means that if a potential attacker wants to launch a 51% attack, they must overcome this obstacle. Computing power also represents the overall interests of the entire community.

Now, the increase in hashrate is the missing piece of the Ethereum community. Ethereum hashrate has fallen more than 42% from its all-time high (ATH) in August 2018. To illustrate this, let’s look at Bitcoin hashrate. Bitcoin hashrate also reached its all-time high (ATH) in the summer of 2018. After reaching its all-time high, Bitcoin hashrate remained above 22%.

Hashrate as a metric has seen the cryptocurrency community split in 2019. In earlier years, all cryptocurrencies moved in unison, regardless of whether prices were rising or falling, or whether on-chain metrics were rising or falling. But now, investors seem to have more time to figure out which blockchain projects are worth investing in. This has divided market returns across the industry (about half of cryptocurrencies are priced lower than in December 2018), and also divided blockchain hashrate on proof-of-work (PoW) chains. So far, only Bitcoin and Litecoin on PoW chains have achieved the highest hashrates recorded on the network in 2019.

Bitcoin Cash, Bitcoin SV, and Ethereum are all below their network’s highest recorded hashrate. On the surface this isn’t a big problem. However, these chains open themselves up to potential attacks (and the currencies on these chains are more vulnerable). As of today, a 51% attack on Bitcoin costs over $850,000 in one hour; a 51% attack on Ethereum would only cost $100,000. Bitcoin SV is the most vulnerable coin on the Proof of Work (PoW) chain. At the time of writing, a 51% attack on it costs just $11,000.

The cost of the attacks described above is not a big problem for nation states or large corporations, which can easily launch attacks on major cryptocurrencies. If these major cryptocurrencies are intact for the next few or ten years, these companies will have to protect their chains from attacks by larger and better-funded villains.