51% Attack – What is 51% Attack? Get to Know Everything about this Attack


In the world of cryptocurrency, 51% attack has become a very common term. It is a kind of attack where an entity gains control over the majority of the network hashrate. The entity then uses that control to perform various malicious actions like double-spending and reordering transactions. In this article, I will explain what exactly is a 51% attack and how it can be performed.

The basic idea behind any blockchain based cryptocurrency is that every transaction stored in the blockchain should be final and cannot be changed once it is confirmed by the network. However, controlling more than half of the total hashrate makes it possible to perform one or both of these attacks on any blockchain based cryptocurrency. Let’s look at some examples to understand how these attacks work in real-time scenarios.

What Is a 51% Attack?

A 51% attack is one of the most serious attacks that can be performed on a blockchain cryptocurrency. It is also called a majority attack or a “hash attack.” This type of attack occurs when an entity gains control over more than half of the total hashrate of a network and then uses that control to perform various malicious actions.

The attacker can use this majority control to:
• Spend coins twice (double-spend)
• Prevent transactions from gaining confirmations (reject transactions)
• Prevent new blocks from being added to the blockchain (reorganize the blockchain)

How a 51% Attack Works

Let’s take a look at how a 51% attack works with an example. Suppose Alice has 1 Bitcoin and she sends 0.5 BTC to Bob and the remaining 0.5 BTC to Charlie. Now, if one entity controls more than half of the total hashrate of a network, then it can create its own blockchain by mining blocks on that blockchain using its own hashpower.

The attacker will then use his/her own blockchain to perform various malicious actions like double-spending and reordering transactions. The attacker will also try to prevent other miners from adding new blocks to the original blockchain (i.e., the one that contains Alice’s transactions).

This way, it will be able to successfully perform double-spending and prevent transactions from gaining confirmations (reject transactions) as well as prevent new blocks from being added to the original blockchain (reorganize the blockchain).

51% Attack in Bitcoin

Let’s take a look at an example to understand how a 51% attack can be performed in Bitcoin. Suppose Alice has 1 BTC and she sends 0.5 BTC to Bob and the remaining 0.5 BTC to Charlie. Now, if one entity controls more than half of the total hashrate of a network, then it can create its own blockchain by mining blocks on that blockchain using its own hashpower.

The attacker will then use his/her own blockchain to perform various malicious actions like double-spending and reordering transactions. The attacker will also try to prevent other miners from adding new blocks to the original blockchain (i.e., the one that contains Alice’s transactions).

This way, it will be able to successfully perform double-spending and prevent transactions from gaining confirmations (reject transactions) as well as prevent new blocks from being added to the original blockchain (reorganize the blockchain).

Likelihood of a 51% attack

It is hard to predict the likelihood of a 51% attack. The reason being that it depends on the number of miners, the hashrate they control, and their strategy. If a miner is able to control more than half of all the hashpower, then he/she can perform a 51% attack. The probability of this happening is dependent on various factors like how many miners are in the network and how big their hashrate is.

51% Attack in Ethereum

Let’s take a look at an example to understand how a 51% attack can be performed in Ethereum. Suppose Alice has 1 ETH and she sends 0.5 ETH to Bob and the remaining 0.5 ETH to Charlie. Now, if one entity controls more than half of the total hashrate of a network, then it can create its own blockchain by mining blocks on that blockchain using its own hash power.

The attacker will then use his/her own blockchain to perform various malicious actions like double-spending and reordering transactions. The attacker will also try to prevent other miners from adding new blocks to the original blockchain (i.e., the one that contains Alice’s transactions).

This way, it will be able to successfully perform double-spending and prevent transactions from gaining confirmations (reject transactions) as well as prevent new blocks from being added to the original blockchain (reorganize the blockchain).

51% Attack Real-World Examples

The largest Bitcoin mining pool, AntPool, has a 51% attack potential. This can be seen from the fact that it is one of the largest pools in terms of hashrate and it controls more than 30% of the total hashrate. This means that it has the ability to potentially create its own blockchain by mining on a chain with its own hashpower.

As we can see from the above figure, if AntPool controls more than half of the total hashrate, then it can create a blockchain where all transactions will be rejected and new blocks will not be added to the original blockchain.

51% Attack in Bitcoin Mining Pools

There are two types of mining pools: large and small. The former refers to any pool that controls more than 10% of the total hashrate while the latter refers to any pool that controls less than 10%. A large mining pool is also referred to as an “up-taker” while a small mining pool is also referred to as “down-taker”.

The major difference between them is in their target audience. Large miners aim at larger entities such as miners or pools while small miners aim at smaller entities such as single users or individual miners (e.g., solo miners).

We can see above that AntPool has very few users since it controls only around 1% of all hashing power. Hence, this indicates that its target audience are other miners who want to control more hashing power (e.g ., double their hashing power).

51% Attack vs. 34% Attack

As we saw above, a 51% attack is much larger than a 34% attack. This means that the attacker will be able to double-spend and reorganize the blockchain much better than any user with 34% of the total hashrate. This is because a 51% attack requires much less mining power than a 34% attack. In other words, it is much easier for an attacker to double-spend and reorganize the blockchain compared to any user with 34% of the total hashrate.

Conclusion

In conclusion, we can see that a 51% attack is a much larger attack than a 34% attack. This means that the attacker will be able to double-spend and reorganize the blockchain much better than any user with 34% of the total hashrate. This is because a 51% attack requires much less mining power than a 34% attack. In other words, it is much easier for an attacker to double-spend and reorganize the blockchain compared to any user with 34% of the total hashrate.


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