According to the firm, launching a successful attack on Ethereum would be much more expensive and time-consuming than Bitcoin
ConsenSys, the company behind MetaMask, has submitted a public comment letter to the US Securities and Exchange Commission (SEC), advocating for the approval of a spot Ethereum exchange-traded fund (ETF). The letter highlights the robust security features of Ethereum’s Proof of Stake (PoS) mechanism, specifically addressing concerns about potential fraud and manipulation within the network.
The SEC’s request for public comments , issued on March 8, seeks insights into whether Ethereum’s PoS could present unique security challenges. ConsenSys responded with a comprehensive argument, asserting that Ethereum’s PoS surpasses the security benchmarks established by Bitcoin’s Proof of Work (PoW), which has already been the basis for approved Bitcoin-based ETFs.
According to the firm, launching a successful attack on Ethereum is more expensive than attacking Bitcoin. Plus, an attack on Ethereum would also be much slower. Researchers estimate it could take nearly six months to gain control of the network, while an attack on Bitcoin potentially happens faster.
“The total cost to attack on Ethereum would be nearly $34.39 billion (at December 2023 ether prices), and it would take nearly six months.20 The total cost to attack on Bitcoin, consisting mostly of the cost of computer hardware and electricity, would range from just under $5 billion to a little over $20 billion and could be waged more or less immediately. This makes Ethereum significantly more costly to attack than Bitcoin for the particular scenario addressed by the researchers,” wrote ConsenSys.
ConsenSys additionally outlined several key advantages of Ethereum’s PoS, including faster block finality, a distributed and randomized validation process, higher network attack costs, and slashing penalties for validators who breach protocol rules. These features, combined with Ethereum’s environmental efficiency and transparent, decentralized community, provide a strong case for the network’s resilience against fraud and manipulation.
The letter concludes with a call to the SEC to acknowledge the advanced safeguards inherent in Ethereum’s design, which not only meet but exceed those of Bitcoin-based ETPs.
“There is no justifiable reason to deny the listing and trading of the iShares Ethereum Trust based on concerns over ether’s susceptibility to fraud and manipulation. We urge the Commission to recognize the advanced safeguards inherent in Ethereum’s design, which not only meet but exceed the exemplary security and resilience safeguards underlying Bitcoin-based ETPs previously approved by the Commission,” stated ConsenSys.
Last month, Coinbase sent a comment letter to the SEC in support of spot Ethereum ETFs . Coinbase’s main claim in the letter is that Ethereum (ETH) is not a security and that Ethereum’s PoS system effectively manages the network and mitigates risks. The firm also cited the recent approval of several spot Bitcoin ETFs as a strong precedent for approving a similar product for Ethereum.
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