Everything about 51% attack on a blockchain

Spread the love
What is a 51% attack?

A 51% attack is an attack on a blockchain, most referred to bitcoins, for which such an attack is still hypothetical, by miners being in charge of more than 50% of the network’s mining hash rate or computing power.
The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also can reverse transactions that were completed while they were in control of the network, meaning they could double-spend coins.
They would almost certainly can’t create new coins or alter old blocks. A 51% attack would probably not destroy bitcoin or another blockchain-based currency outright, even if it proved highly damaging.

How a 51% attack works

Bitcoin and other cryptocurrencies are based on blockchain technology, a form of a distributed ledger. These digital files record every transaction made on a cryptocurrency’s network available and viewable to all users. So, no one can spend a coin twice. (So-called “private blockchains” introduce permissions to prevent certain users in the general public from seeing all the data on a blockchain.)
As its name implies, a blockchain is a chain of blocks, which are bundles of data that record all completed transactions during a period. For bitcoin, a new block is generated about every 10 minutes. Once a block is mined, it cannot be altered since a fraudulent version of the public ledger would quickly be spotted and rejected by the network’s users globally.
However, by taking charge of the majority of the computing power on the network, an attacker or group of attackers can interfere with the process of recording new blocks. They can prevent other miners from completing blocks, theoretically allowing them to monopolize the mining of new blocks and earn all of the rewards.

Bitcoin

For bitcoin, the reward is currently 12.5 newly-created bitcoins, though it will finally drop to zero. They can block other users’ transactions, and they can send a transaction and then reverse it, making it appear as though they still had the coin they just spent. This vulnerability, which is called double-spending, is the digital equivalent of a perfect counterfeit and the basic cryptographic hurdle the blockchain was built to overcome. So a network that allowed for double-spending would quickly suffer a loss of confidence.
Changing historical blocks would be really hard even in the event of a 51% attack. The further back the transactions are, the more difficult it would be to change them. It would be unlikely to change transactions before a checkpoint, past which transactions are hard-coded into bitcoin’s software.
On the other hand, a form of a 51% attack might happen with less than 50% of the network’s mining power, but with a lower probability of success.

51% Attack Real-World Examples

Krypton and Shift, two blockchains based on Ethereum, experienced 51% attacks in August 2016.
In May of 2018, Bitcoin Gold, at the time the 26th-largest cryptocurrency, suffered a 51% attack. The malicious actor or actors controlled an enormous amount of Bitcoin Gold’s hash power, such that even with Bitcoin Gold repeatedly attempting to raise the exchange thresholds, the attackers could double-spend for several days, eventually stealing more than $18 million worth of Bitcoin Gold.

51% Attack vs. 34% Attack

The tangle, a distributed ledger that is basically distinct from a blockchain but built to accomplish similar goals, could theoretically succumb to an attacker deploying over a third of the network’s hash rate, referred to as a 34% attack.
 

Leave a Reply

Your email address will not be published.