What is the Cost of Keeping Blockchain Secure?

April 17, 2019 / by CathyTest ZolloTest

Last March 25, cryptocurrency data portal Messari published a new screener that revealed how much miners are paid for top-listed “proof of work” coins. The figures estimated that $7.3 million dollars worth of BTC tokens are issued on a daily basis. Meanwhile with regards to mining fees, it is shown that more than $115,000 are distributed.

These calculations are based on the new issuance and transaction fees that eventually pointed to Bitcoin churning out the most assets. 

On the other hand, the daily issuance cost of Ethereum was around six times lower compared to Bitcoin, clocking in at $1.85 million. Its trading costs are also currently halved at $58,230, which is disbursed to the “proof of work” miners. However, it’s important to note that these rough numbers are still subject to change since Ethereum is set to make the shift to a “proof of stake” this year. Per the reports, Bitcoin and Ethereum are paying roughly 0.1% of their market capitalization to secure their networks. 

These costs are spent on miners for the purpose of ensuring that the “proof of work” network provides security against cyber attacks, but also shows that the two networks are, so far, the only two cryptos to invest such an amount for security. For one, Bitcoin Cash is known to spend an estimated $280 million, while ZCash spends around $400 million. Litecoin comes the closest at $936 million for security costs. Still, only Bitcoin and Ethereum networks have spent multi-millions.

While the World Economic Forum states that blockchain technology offers a good amount of security and privacy, it isn’t completely impenetrable. Investing this much in security adds a valuable layer of protection against cyber attacks. In the event that a hacker decides to penetrate these networks, they must first factor in the costs for getting control of the network. On top of this, there are other barriers to entry like mining devices and electricity.

Recently, cyber crime has become a hot topic for industries in and outside of tech. Many of the world’s biggest companies have lost millions of dollars, not to mention having to suffer intense public backlash from scandals like data leaks. Even Ethereum isn’t exempt, having recently suffered its own hit from attacks.

In response to incidents like these, Maryville University notes that cyber security has become one of the most lucrative fields. Though hiring top-notch cyber security personal is far from cheap, there’s a much bigger price to pay if criminals manage to slip through the cracks. In fact, the Commission on the Theft of American Intellectual Property claims annual losses usually add up to a whooping $600 billion in the US alone.

On that note, passwords and security questions no longer cut it, and it’s time corporations let cyber experts bring out their big guns.