This phenomenon, though rare, poses a significant threat to the stability and trustworthiness of blockchain systems. What a 51% attack entails, how it can potentially disrupt a network, its limitations, and the safeguards in place to prevent such an event.
A 51% attack, sometimes known as a majority attack, is a significant threat to blockchain systems. This occurs when a single entity gains control over more than half of a blockchain network’s total hashing power, enabling them to disrupt the network’s integrity. They can potentially reorder transactions, block their confirmation, and achieve mining monopoly. An example of this would be a bad actor gaining over 51% control in the Bitcoin network, enabling them to double-spend by rewriting parts of the blockchain.
Despite the potential damage, 51% attacks have limitations. The attacker can’t prevent transactions from being broadcasted or reverse others’ transactions. They also can’t create coins from nothing or change block rewards. Transactions deeper in the blockchain are more secure, as altering them would require mining more new blocks, which is why Bitcoin typically requires six confirmations for a transaction.
The likelihood of a 51% attack on large networks like Bitcoin is low due to the network’s size, making it nearly impossible for an individual or group to gain enough computational power. Smaller networks are more vulnerable, as seen with Bitcoin Gold in 2018, which suffered a significant theft from such an attack.
To prevent 51% attacks, blockchains use various strategies. Increasing network participation and running more nodes helps distribute control. Consensus mechanisms like Proof-of-Work and Proof-of-Stake require nodes to validate transactions, making it costly for an attacker to gain majority control. Promoting decentralization, by distributing nodes geographically and among diverse participants, further mitigates the risk of any single entity gaining excessive power.
Sounds scary, but can you imagine how thrilling it is to be on the other side *cruelly laughing*.