The 51% attack is common in the cryptocurrency world. It produces disastrous consequences. Concretely, what is it?
There are various solutions to obtain. One of them is to do mining in order to get rewards. And to better take advantage of these rewards, it’s not uncommon for miners to get together and form a pool. But this concept, which contributes to the development of , can also become its biggest nightmare. This is the case when a 51% attack occurs. What is it about ? What are the chances of it happening? Here are our responses.
What is the 51% attack?
L’of cryptocurrencies is based on several principles, including that of the existence of . Without blockchain, a cryptocurrency cannot exist. But the blockchain can become vulnerable and be taken over by any person, group of people, or entity. In all cases, for the attack to be effective and for it to have real consequences, its initiators must have a mining power greater than 50%. So at least 51%.
When they have a majority of the computing power of the network, hackers can reverse transactions made by other users. They can also decide which transactions will be validated and which will not.
Generally, the 51% attack is directed against Proof of Work (PoW) blockchains. Why ? Because in this type of decentralized governance, it is the transactions approved by the majority that are recorded in the transaction register.
What type of blockchains are vulnerable to attack?
In theory, performing a 51% attack is easy. All you need is aof mining and to have under its control the majority of the shares of the blockchain network. As long as the hackers have the necessary funding to complete the operation, they can make it a success. Concretely, how does this happen?
To understand, take the case of. With powerful machines , it is possible to have a considerable computing power. This power grows more when several miners get together. However, in practice, the total computing power of the network (BTC) and its size make the operation difficult, if not impossible. For its realization, it would be necessary that thousands of miners team up and use heavy equipment.
But the Bitcoin (BTC) blockchain is not the only one that exists. Are the others just as resistant? Not really. If we take the case of a blockchain like LeaCoin (LEA), the data changes. Indeed, because the blockchain is small, it is vulnerable. In addition, since this digital asset is considered a shitcoin, it has little value. Hackers who bolster their equipment fleet with ASIC computers with a total computing power that exceeds 1 TH / s can succeed in a 51% attack on the blockchain.
What are the consequences of a 51% attack?
The 51% attack has positive consequences for … the hacker. Indeed, since it controls a large part of the activity of, he receives considerable rewards. These rewards become even more important when the attack is carried out by a collective of people. After all, it is usually for financial gain that some individuals engage in blockchain attacks.
If, for the hacker, the attack is positive, for the cryptocurrency which is victim of it, the consequences are dramatic. Among other things, the asset loses its value. Its reputation is compromised and investors are losing confidence. They will no longer use it to carry out their transactions. As a result, the loss in value is further accentuated.
Another consequence is that the hacker can perform double attacks. To do this, it modifies the history of the blockchain; we must not forget that it has the necessary computing power and that it has the majority of the shares of the network. By changing the history of the blockchain, the hacker can recover the coins he has spent and reinvest them again in the network.
There is a situation which is even more serious. A 51% attack gives the author the possibility of carrying out an attackwhich will allow it to shut down the entire network. Thus, it affects the economic system and causes considerable losses for other miners.
Examples of attack 51%
The cases of attack of the 51% are numerous. Unfortunately, apart from Bitcoin (BTC), othersseem vulnerable and are perfect targets for hackers. Moreover, many of them have been victims of it over time. Let’s see some of them.
Bitcoin Gold (BTC) is a variation of Bitcoin (BTC), but it does not have the samethan him. In May 2018, when it was the 26th largest cryptocurrency in the world, it was the target of a 51% attack. Malicious actors had managed to gain control of most of the cryptocurrency’s hashing power. In addition, they had been able to earn twice as much than what they had spent on the operation.
Project Verge has been attacked twice since its launch. The attack that took place in April 2018 is the one that had the most effect. As the offer of Verge (XVG) was not limited, the hacker, whose identity has remained unknown to this day, issued newvalued at over $ 1 million.
In November 2018, it was the turn of the cryptocurrency Vertcoin (VTC) to be the target of a 51% attack. One or more people had taken over the hash power and had managed to steal about $ 100,000.
Ethereum Classic (ETC) was also the target of two 51% attacks. A first attempt took place between July 31 and August 1 of the same year. The person responsible for this attack was able to get away with more than 807,000 ETCs, or $ 5.68 million at the time. For the success of this project, he had spent $ 192,000 in Bitcoin (BTC), according to the intelligence company Bitquery. A few days later, on August 6, a new attack took place that resulted in the reorganization of 4,000 blocks of the blockchain.
What are the chances that a 51% attack will occur?
While in theory the 51% attack is possible, in practice it seems impossible. It is true that examples show that it has already occurred on several occasions. However, analysts believe that a malicious miner would need hash power equivalent to that of millions of miners around the world. In addition, he has to spend a large sum of money for the purchase of the necessary mining devices.
However, this does not mean that the chances of an attack occurring are nonexistent. On the contrary, they are real. When there is an error in the code of a blockchain for example, this can allow the hacker to produce new blocks at afaster than normal. This way he can launch a 51% attack.
The 51% attack is a real threat to cryptocurrency blockchains. It has already happened to many digital assets. However, theoretically, it seems impossible to achieve, because it requires high computing power and the activation of several devices. To date, the Bitcoin (BTC) blockchain is one whose probability of becoming a target of hackers is 0%.