51% attack – Blockchain technology is one reason bitcoin is better than fiat currencies or government-issued money. Blockchain is a digital ledger whose information cannot be changed or altered. This makes it impossible to double-spend or use the same bitcoin twice. Blockchains technology can ensure that no one can falsify bitcoin transactions.
Blockchain technology, in particular transaction data, has been widely accepted as a method of data collection. This allows for monitoring of any data manipulation practices. But is Blockchain safe?
Although security is extremely tight, 51% of attacks or 51% of attacks still occur. What exactly is a 51% attack?
Definition 51% Attack
51% Attack: This is an attack on Blockchain. These attacks are usually carried out on Bitcoin. This is often carried out by miners that control more than 50% or less of the network’s mining rate.
This could happen when miners or groups of miners seize control of a large Proof of Work-based Blockchain. Some attackers may be able to stop the confirmation of new transactions. Payouts between all or some users will stop if there are not confirmed in time. They can be used to change transactions already made and create double-spending problems.
Double-spending means that the digital currency in the Blockchain is counterfeited, duplicated, or used twice. Tokens or coins that are forgery- or duplicating can generally be used up 2x. Tokens are only allowed to be used once. Therefore, the network operating environment will be affected.
What does the 51% Attack look like?
You can create two separate blockchains to conduct a 51% attack. Blockchain technology allows new blocks to be created and broadcasted to all miners when the mathematical solution is found. If a miner or group of miners controls more computing power than 50%, they cannot broadcast their hash.
Two blockchains exist so miners can create Bitcoin transactions using the newer version. They can also buy items using Bitcoin. They can create an alternative blockchain, where they will not be counted in the Bitcoin transactions.
Blockchain mining grasps the idea of democracy and follows most aspects of it. To this end, all miners will regard the longest blockchain chain as the correct chain.
To fool other miners, 51% of attackers will need to keep confirming new transactions, race to create a new block, and compete with the old blocks. This is a huge effort that requires energy and is almost impossible on a large Bitcoin network.
Did the 51% Attack ever occur?
The answer is “Never.” In July 2014, the well-known mining pool GHash.IO surpassed the 51% limit, leading the Bitcoin mining have hate. The bitcoin community sought to escape this terror. Peter Todd, a prominent bitcoin developer, sold half of his assets due to the pool’s rapidly growing stature.
In response to the 51% hack information, bitcoin prices fell from USD 633 and USD 600 between that time and the next. GHash.IO gave a confession saying that the mining pool will not exceed 40%. This helped ease the fear of the masses. Representatives at GHash.IO also asked fellow miners to set a good example and help the whole Bitcoin community.
They tried to propose that a committee be formed to oversee the issue of the 51% attack. This committee will include representatives of mining groups, Bitcoin companies, and other experts.
How can we prevent 51% attacks?
Yes. Decentralization and control of miners is one way to avoid 51% attacks. As long as the network is free from any substance that controls more than 50%, it will be safe.
The possibility of an attack on bitcoin networks is extremely unlikely at 51%. It’s even close to 0. A miner or a group must have enormous computing power to achieve this feat. They have to conquer the millions of Bitcoin miners across the globe. To have such a powerful hashing capability, a miner needs billions in equipment.
Miners can’t use supercomputers to mine Bitcoin because they cannot control millions of computers. This is not an easy task. Also, the electricity cost to mine Bitcoin is high. Therefore, the 51% attack led to losses that a small group of miners incurred.
A 51% attack on a large network is almost impossible, especially on the Bitcoin Blockchain, which is considered the most secure and robust cryptocurrency network. Although it is very difficult for attackers to gain control over other Bitcoin networks, it is possible to do so with less valuable cryptocurrencies. Altcoins, when compared to Bitcoin, have a much lower level of hashing ability. Monacoin, Bitcoin Gold, ZenCash, and ZenCash are three examples of cryptocurrencies that have fallen prey to the 51% attack.