Definition of 51% attack
A 51% attack refers to an attack on a blockchain – usually bitcoin, for which such an attack is still hypothetical – by a group of miners controlling more than 50% of the network’s mining hashrate, or of computing power. Attackers could prevent new transactions from getting confirmations, which would allow them to stop payments between some or all users. They would also be able to reverse the transactions that were made while they were controlling the network, which means they could spend twice as much on coins.
They certainly wouldn’t be able to create new coins or modify old blocks, so a 51% attack probably wouldn’t destroy bitcoin or any other blockchain-based currency, even if it turned out to be very damaging.
Destroy 51% attack
Bitcoin and other cryptocurrencies are based on blockchains, a form of distributed ledger. These digital files record every transaction made over a cryptocurrency network and are available to all users – and the general public – for review, which means no one can spend a coin twice. (The so-called “private blockchains” introduce permissions to prevent certain users of the general public from seeing all the data on a blockchain.)
As the name suggests, a blockchain is a blockchain, data sets that record all transactions completed during a given period. For bitcoin, a new block is generated approximately every 10 minutes. Once a block is finalized – “mined” in the lingo – it cannot be changed, as a fraudulent version of the general ledger would be quickly spotted and rejected by network users.
However, by controlling the majority of the computing power of the network, an attacker or group of attackers can interfere with the process of registering new blocks. They can prevent other miners from completing blocks, theoretically allowing them to monopolize the extraction of new blocks and earn all the rewards. For bitcoin, the reward is currently 12.5 newly created bitcoins, although it will eventually drop to zero. They can block other users’ transactions. They can send a transaction and then cancel it, giving the impression that they still have the part they just spent. This vulnerability, known as double spending, is the digital equivalent of perfect forgery and the basic cryptographic obstacle that the blockchain was built to overcome, so a network that enabled double spending would suffer quickly. loss of confidence.
Changing historical blocks – transactions blocked before the attack began – would be extremely difficult even in the event of a 51% attack. The further back the transactions, the more difficult it would be to modify them. It would be impossible to modify transactions before a checkpoint, after which transactions are hard-coded in Bitcoin software.
On the other hand, a form of attack at 51% is possible with less than 50% of the mining power of the network, but with a lower probability of success.
The ghash.io mining pool briefly exceeded 50% of the bitcoin network’s computing power in July 2020, which led the pool to voluntarily commit to reducing its share of the network. He said in a statement that he would not reach 40% of total mining power in the future.
Krypton and Shift
Krypton and Shift, two Ethereum-based blockchains, were attacked 51% in August 2020.
In May 2020, Bitcoin Gold, the 26th largest cryptocurrency at the time, suffered a 51% attack. The malicious actor (s) controlled much of the hashing power of Bitcoin Gold so that even with Bitcoin Gold repeatedly trying to increase trading thresholds, attackers were able to double spending for several days, eventually steal over $ 18 million from Bitcoin Gold.
Entanglement, a distributed registry that is fundamentally distinct from a blockchain but designed to achieve similar goals, could theoretically succumb to an attacker deploying more than a third of the network hashrate, called a 34% attack.