51% Attack Definition
A 51% attack refers to a potential attack on a blockchain network, where a single entity or organization is able to control the majority of the hash rate, potentially causing network disruption. With control of over half the network’s mining power, the entity could manipulate it to its advantage, including altering the transaction history or double spending coins.
51% Attack Key Points
- An attack on the blockchain, where one party obtains more than half of the network’s mining power.
- The attacker could potentially interfere with the confirmation of new transactions, allow for double spending of coins, and prevent other miners from completing blocks.
- Mostly theoretical, but there have been several real-world instances.
- The security of cryptocurrencies relies on decentralization, which a 51% attack undermines.
What is a 51% Attack?
A 51% attack is a potential security peril for blockchains. Given that blockchains operate on a decentralized network, no single entity should ideally have control over more than 50% of the hash rate. If one miner or mining pool controls more than 50% of the network’s mining power, they could potentially interrupt the transaction process on that blockchain. The term emanates from the structure of blockchain technology where each block of transactions is linked to the preceding ones, creating a chain of blocks or blockchain.
Why is a 51% Attack important?
Understanding the concept of a 51% attack is important as it brings light to potential weaknesses in the security of blockchains and cryptocurrencies. This type of attack fundamentally threatens the trust in a blockchain, because it undermines the system’s decentralization.
Who is potentially affected by a 51% Attack?
Every participant in the blockchain, irrespective of their role, could potentially be affected by a 51% attack. While those directly participating in the mining process are obviously affected, as their honest efforts may become obsolete, users of the blockchain may face repercussions as well. They may experience disrupted transactions, or worse, their coins could be double-spent by the attacker.
When can a 51% Attack happen?
A 51% attack can theoretically occur whenever an individual or group attains control of over half of the network’s mining power. This tends to occur more frequently in smaller, less popular cryptocurrencies as they have lower hash rates, making it easier and less expensive for a malicious entity to gain control over more than half of the mining power.
How does a 51% Attack happen?
This type of attack happens when an entity has the ability to control and manipulate over 50% of a network’s mining power, or hash rate. Such a majority control allows the entity to disrupt the normal generation and verification of blocks. They can stop transactions from gaining confirmations, halt payments between some or all users, reverse transactions which results in a double-spending problem, and prevent other miners from mining valid blocks.
