Blockchain Hack: The 51% attack.
The uniqueness of Bitcoin is its blockchain’s security. And this is due to its stability, and its transparent transaction ledger. It is safe to believe that the bitcoin blockchain is unhackable. Its support comes from a sequence of checks and balances that maintain security. But, there is one way to disrupt the system, and this is with the 51% Attack.
Read on for more information about what a 51% attack is, and how it could affect Bitcoin ‘s stability.
What is an Assault of 51%?
It all boils down to hashing capacity. Hashing strength, or hash rate, is the energy that miners use to speed up numerical calculations. This support is necessary to build blocks in the blockchain. And to culminate in Bitcoin’s compensation for the difficulty of validating transactions in that block. The norm involves a widespread distribution of the hashing speeds throughout the network.
But, a 51% attack, also called a majority attack, occurs when one party holds over 50% of the hashing power in bitcoin mining. And may use the majority influence to trigger a disturbance to the network. This person, the attacker, will be capable of censoring transactions. They could develop their hidden blockchain. And use that hidden blockchain to interrupt the network agreement surrounding activities. They do this by fooling the network into trusting events that never happened. Also, they could inhibit miners from mining. They do this by triggering long pauses between creating blocks.
If an attacker owns 51% of the hashing power, they will spend their coins twice. Or buy anything they want, and cancel the transfer afterward. For instance, if the offender intends to buy a vehicle. They can make payments using their bitcoins and drive away with their new purchase. But since they have a hashing power monopoly, they could build a false blockchain void of the transaction. Or reverse the whole event. The network can cancel the initial transaction based on the real blockchain on the fake blockchain. The attacker drives off with their car and coins anyway.
Limitations to the attacker‘s power?
Even if a party controls 51% of the hashing power, the damage they can do has its limit. And this is because of the blockchain’s permanent nature. For starters, they will not be able to go back and undo or alter already verified transactions. Also, they cannot adjust the bitcoin incentive for creating blocks. They cannot snatch coins from other people, or even make new coins.
How Does the System Prevent a 51% Attack?
Maintaining the hashing capacity shared between miners is the best way to avoid a 51% Attack. While large mining firms use their size to mine with thousands of machines, the bitcoin blockchain is still decentralized.
Bitcoin’s bedrock is its decentralized structure and consensus-based block creation. As long as the community is aware of where the hashing power is heading, it will deter attacks.
Yet, in the end, it is down to capital and size. Since hashing requires a high amount of resources, pulling off a 51% Attack will cost tons of money. Gains can be higher by utilizing the hashing capacity to mine bitcoin, instead of using it to circumvent the system.
How probable is 51% Attack?
The probability of it occurring is small. And this is because of the intrinsic decentralization involved with mining. And the sheer volume of capital and effort to pull it off. Even if an attacker ends up having 51 percent of the hash rate, the network has a set of fault-safes in effect. These include protocol recording to stop the attack. Moreover, there are too many eyes on the public blockchain that it is easy to spot any fraudulent behavior.
Bear in mind that although Bitcoin is very safe, newer altcoins may be at risk of a 51% Attack. At this stage, bitcoin is very well-established that it will be virtually unlikely to achieve a 51% Attack. And it will be challenging to maintain an attack for too long because of the fail-safes in effect.
If bitcoin keeps adhering to the ideology of decentralization and agreement within the community, control will stay in many hands. Thus, maintaining its security.
So are you feeling secured with blockchain technology or not? Comment below.