What is a 51% attack?

There are various solutions to obtain cryptocurrencies. One of them is to mine in order to get rewards. And to take better advantage of these rewards, it is not uncommon for miners to get together and form a pool. But this concept, which contributes to the development of blockchain, can also become its biggest nightmare. This is the case when a 51% attack occurs. What is it about ? What are the chances of it happening? Here are our answers.

What is the 51% attack?

L’universe cryptocurrencies is based on several principles, including that of the existence of blockchain. Without blockchain, a cryptocurrency cannot exist. But the blockchain can become vulnerable and be taken over by a person, a group of people or an entity. In any case, for the attack to be effective and for it to have real consequences, its initiators must have a mining power greater than 50%. So, 51% at least.

When they have a majority of the computing power of the network, hackers can cancel transactions made by other users. They can also decide which transactions will be validated and which will not.

Generally, the 51% attack is directed against blockchains of the type Proof of Work (PoW). Why ? Because in this type of decentralized governance, it is transactions approved by the majority that are recorded in the transaction ledger.

What kind of blockchains are vulnerable to an attack?

In theory, achieving a 51% attack is easy. It is enough to have a node of mining and to have under its control the majority of the shares of the blockchain network. As long as the hackers have the necessary funding to carry out the operation, they can make it a success. Concretely, how does this happen?

To understand this, let’s take the case of Bitcoin (BTC). With powerful ASIC machines, it is possible to have considerable computing power. This power grows more when several miners come together. However, in reality, the total computing power of the Bitcoin (BTC) network and its size make the operation difficult, if not impossible. For its realization, thousands of miners would have to join forces and use heavy equipment.

But the Bitcoin (BTC) blockchain is not the only one out there. Are the others as resistant? Not really. If we take the case of a blockchain like LeaCoin (LEA), the data changes. Indeed, because the blockchain is small, it is vulnerable. Moreover, since this asset digital is considered a shitcoin, it has little value. Hackers who augment their fleet of equipment with ASIC computers with a total computing power that exceeds 1 TH/s can achieve a 51% attack on the blockchain.

What are the consequences of a 51% attack?

The 51% attack has positive consequences for… the hacker. Indeed, since it controls a large part of the activity of cryptocurrency mining, he receives considerable rewards. These rewards become even greater, when the attack is carried out by a collective of people. After all, it is usually for financial gain that some individuals engage in blockchain attacks.

If, for the hacker, the attack is positive, for the cryptocurrency that is the victim, the consequences are dramatic. Among other things, the asset loses its value. Its reputation is compromised and investors lose confidence. They will no longer use it to carry out their transactions. As a result, the loss in value is further accentuated.

Another consequence is that the hacker can perform double attacks. To do this, it modifies the history of the blockchain; it should not be forgotten that it has the necessary computing power and that it has the majority of the shares of the network. By changing the history of the blockchain, the hacker can recover the coins he spent and reinvest them back into the network.

There is a situation which is even more serious. A 51% attack gives its author the possibility of carrying out an attack Back which will allow him to shut down the entire network. Thus, it affects the economic system and causes huge losses for other miners.

Attack examples 51%

The cases of attack of the 51% are numerous. Unfortunately, apart from Bitcoin (BTC), the other cryptocurrencies seem vulnerable and are perfect targets for hackers. Moreover, many of them have been victims of it over time. Let’s see a few.

Bitcoin Gold (BTC) is a variation of Bitcoin (BTC), but it does not have the same resistance than him. In May 2018, when it was the 26th largest cryptocurrency in the world, it was the target of a 51% attack. Malicious actors had managed to take control of most of the cryptocurrency hashing power. In addition, they had been able to earn twice as muchmoney than what they had spent on carrying out the operation.

The Verge project has been attacked twice since its launch. The attack that took place in April 2018 is the one that had the most effect. Since the supply of Verge (XVG) was not limited, the hacker, whose identity has remained unknown to this day, issued new tokens worth more than $1 million.

In November 2018, it was the turn of the cryptocurrency Vertcoin (VTC) to be the target of a 51% attack. One or more people had taken control of the hashing power and managed to steal around $100,000.

Ethereum Classic (ETC) was also the target of two 51% attacks. A first attempt took place between July 31 and August 1 of the same year. The person responsible for this attack was able to get away with more than 807,000 ETC, or $5.68 million at the time. For the success of this project, he had paid $ 192,000 in Bitcoin (BTC), according to the intelligence company Bitquery. A few days later, on August 6, a new attack took place and led to the reorganization of 4,000 blocks of the blockchain.

What are the chances of a 51% attack happening?

If in theory the 51% attack is possible, in practice it seems impossible. It is true that examples show that it has already occurred on several occasions. However, analysts estimate that a malicious miner would need hashing power equivalent to that of millions of miners worldwide. In addition, he has to spend a large sum of money for the purchase of the necessary mining devices.

However, this does not mean that the chances of carrying out an attack are non-existent. On the contrary, they are real. When there is an error in the code of a blockchain, for example, this can allow the hacker to produce new blocks at a speed faster than normal. This way he can launch a 51% attack.

The 51% attack is a real threat to cryptocurrency blockchains. It has already happened to many digital assets. However, theoretically, it seems impossible to achieve, because it requires high computing power and the activation of several pieces of equipment. To date, the Bitcoin (BTC) blockchain is the one whose probability of becoming a target of hackers is 0%.