Crypto Term 51% Attack – Coin 51% Attack A 51% attack is carried out when more than half of a network’s computer power or mining hash rate is operated by an individual or single group.
What is a ‘51% attack’?
A 51% attack refers to a malicious actor (or a group acting together) controlling more than 50% of the total mining power of a blockchain network and disrupting its integrity.
Due to the way blockchain works, consensus is required to confirm or add a transaction. Malicious actors who control the majority of the hashing or mining power can theoretically “form the majority” in this consensus mechanism and disrupt the integrity of the blockchain by modifying the order of transactions or preventing transaction confirmation, among other things.
Blockchains with low hashing performance have a higher risk of 51% attacks. This is because it is easier for malicious actors to obtain most of the computing power they need. The more miners and resources spent on mining a blockchain, the more secure the blockchain becomes. The Bitcoin network has the most hashing power to mine it, making it recognized as the most secure blockchain in existence.
A 51% attack is an attack on a cryptocurrency blockchain by a group of miners who control more than 50% of the network’s mining hash rate. In theory, owning 51% of the network nodes gives the controlling party the power to change the blockchain.
An attacker can disrupt payments between some or all users by preventing new transactions from being confirmed. You can also cancel transactions completed while in your control. Canceling a transaction can result in a double spend of coins, which is one of the problems that consensus mechanisms such as proof-of-work are designed to prevent.
How much does a 51% attack cost?
The cost of a 51% attack depends on several factors, including the type of blockchain, difficulty of the hashing algorithm, power cost, and available hash rate. Typically, the cost of a 51% attack on a particular blockchain network ranges from thousands to millions of dollars.
Is a 51% attack possible in proof-of-stake?
51% attacks are theoretically possible on Proof-of-Stake (PoS) networks, but are much less likely than on Proof-of-Work (PoW) networks. This is because in PoS, an attacker needs to control most of the tokens staked on the network to control the network, whereas in PoW, an attacker only needs to control most of the network’s hashing power.
Example of cryptocurrency 51% attack
There are several examples of successful 51% attacks on altcoins.
- Bitcoin Fri May 2018: Attackers They were able to control over 51% of the network hash power and used this to double their coin spend and rewrite the blockchain to their advantage.
- Ethereum January 2019 Classic: Attacker They were able to obtain 51% of the network hash power and used it to reconfigure the blockchain to cancel transactions and steal funds.
- Verge, April 2018: Attackers were able to control over 51% of the network hash power and used it to manipulate transactions and create new blocks on the blockchain.
