Professor questions Bitcoin security as derivatives grow

• A Duke University professor said Bitcoin (CRYPTO:BTC) attacks could become profitable through derivatives markets.
• The idea involves shorting Bitcoin while carrying out a costly 51% attack.
• The scenario is theoretical and would still face major technical and financial barriers.

Bitcoin (CRYPTO:BTC) could face a new financial risk because derivatives markets may change the economics of a 51% attack, according to Duke University professor Campbell Harvey.

Harvey said an attacker could spend about US$8 billion to gain majority mining power while holding large short positions in Bitcoin.

“The difference today is the derivatives markets,” said Duke University professor Campbell Harvey.

Harvey estimated the attack would cost about 0.5% of Bitcoin's market value, although the final cost would depend on mining equipment, electricity and network conditions.

He said the attacker would profit from falling Bitcoin prices instead of relying on mining rewards to recover costs.

Podcast host Scott Melker said building enough mining capacity would likely be noticed early, giving miners, exchanges and developers time to respond.

Harvey said the idea is only a theoretical scenario and not a prediction, but he believes investors should consider it when assessing Bitcoin's long-term risks.

At the time of reporting, Bitcoin price was $63,394.14.