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Definition, who is at risk, example and cost
What is a 51% attack?
A 51% attack is an attack on the cryptocurrency blockchain by an entity or group that controls more than 50% of the network. If one party were to gain that much control over a network, they would have the power to alter the blockchain.
Attackers would be able to prevent new transactions from getting confirmations, allowing them to block payments between some or all users. They would also be able to cancel unconfirmed transactions completed while they were in control. Canceling transactions could allow them to double-spend coins, one of the problem mechanisms like proof of work that were created to prevent.
Key points
- Blockchains are distributed ledgers that record every transaction made on a cryptocurrency’s network.
- A 51% attack is an attack on a blockchain by an entity or group that controls more than 50% of the network.
- Attackers with majority control of the network can stop recording new blocks by preventing other miners from completing blocks.
- Changing historical blocks is impossible due to the chain of information stored in the Bitcoin blockchain.
- While a successful attack on Bitcoin or Ethereum is unlikely, smaller networks are frequent targets for 51% attacks.
Understanding a 51% attack.
A blockchain it is a distributed ledger, essentially a database, that records transactions and information about them. The blockchain network achieves majority consensus on transactions through a validation process. The blocks where the data is stored are sealed. Blocks are linked together via cryptographic techniques where information about previous blocks is recorded in each block. This makes it nearly impossible to change blocks once they have been confirmed enough times.
The 51% attack is an attack on the blockchain, in which one group controls more than 50% of the hashing (processing that solves the cryptographic puzzle) power of the network. This group then introduces an altered blockchain into the network at a very specific point on the blockchain, which is theoretically accepted by the network because the attackers would own most of it.
Changing historical blocks – transactions blocked before the attack began – would be extremely difficult even in the case of a 51% attack. The further back the transactions are, the more difficult it is to change them. It would be impossible to modify transactions before a checkpoint, where transactions become permanent in the Bitcoin blockchain.
Attacks are prohibitively expensive
A 51% attack is a very difficult and challenging task on a blockchain network with a high participation rate. In most cases, the attacker group should be able to control the necessary 51% and have created an alternative blockchain that they can insert at exactly the right time. Then, they would need to hash the core network. The cost of doing this is one of the most significant factors preventing a 51% attack.
For example, one of the most advanced application-specific integrated circuit (ASIC) miners is WhatsMiner M63S. Costs over $10,000 (new) and has a hash speed of 406 terahash per second (TH/s). A single or smaller group of miners would not be able to alter and mine the Bitcoin blockchain with just a few of these machines. It would take thousands of these ASICs to outperform the Bitcoin network. Smaller networks could be overcome using these mining rigs, but the benefits of doing so would not outweigh the costs of funding the attack and setting it up.
Hashing power rental services offer attackers lower costs because they only need to rent as much hashing power as they need for the duration of the attack.
After Ethereum went proof-of-stake, a 51% attack on the Ethereum blockchain became even more costly. To conduct this attack, a user or group would need to own 51% of the ETH staked on the network. It’s possible that someone could own that much ETH, but it’s unlikely.
According to Beaconchain, more than 32.3 million ETH were staked on May 8, 2024. An entity would need to own and stake more than 16.5 million ETH (more than $49 billion as of May 8, 2024) to attempt an attack.
Once the attack begins, the consensus mechanism would likely recognize it and immediately cut off the staked ETH, costing the attacker an extraordinary amount of money. Additionally, the community can vote to restore the “honest” chain, so an attacker would lose all their ETH only to have the damage repaired.
Attack timing
In addition to the costs, a group attempting to attack the network using a 51% attack must not only control 51% of the network but also introduce the altered blockchain at a specific time. Even if they own 51% of the network’s hashing rate, they still may not be able to keep up with the block creation rate or insert their own chain before new valid blocks are created by the “honest” blockchain network.
Again, this is possible on smaller cryptocurrency networks because there is less participation and lower hash rates. Large networks make it nearly impossible to introduce an altered blockchain.
Despite the name, you don’t need to have 51% of a network’s mining power to launch an attack. However, such an attack would have a lower chance of success.
Result of a successful attack
In case of a successful attack, attackers could block other users’ transactions or cancel them and spend the same cryptocurrency again. This vulnerability, known as double expense, is the digital equivalent of a perfect counterfeit. It is also the basic cryptographic obstacle that blockchain consensus mechanisms were designed to overcome.
The 51% successful attackers can also implement a Denial-of-Service (DoS) attack, where they block other miners’ addresses for the period they control the network. This prevents “honest” miners from regaining control of the network before the dishonest chain becomes permanent.
Who is at risk of the 51% attack?
The type of mining equipment is also a factor ASIC-secure mining networks are less vulnerable than those that can be mined with GPUs; they are much faster. Cloud services like NiceHash, which considers itself a “hash power broker,” theoretically allow you to launch a 51% attack using only rented hash power, especially against smaller, GPU-only networks.
Bitcoin Gold has been a common target for attackers because it is a smaller cryptocurrency in terms of hashrate. Since June 2019, the Michigan Institute for Technology’s Digital Currency Initiative has detected, observed, or been notified of more than 40 51% attacks—also called chain reorgs or reorgs—on Bitcoin Gold, Litecoin, and other smaller cryptocurrencies.
Are the chances of a 51% Bitcoin attack growing?
On May 8, 2024, the total hashrate of the Bitcoin network was 569.29 exahash per second (EH/s). The first three mining pools for three-day hashrate they were:
- FoundryUSA, at 175.76 EH/s; 30.9% of the total hashrate of the Bitcoin network
- AntPool, at 161.77 EH/s; 28.4% of the total hashrate of the Bitcoin network
- ViaBTC, at 73.11 EH/s; 12.8% of the total network hashrate
Together, these three pools made up 72.1% of the network’s hashrate, a whopping 486.9 EH/s (486.9 million TH/s – your computer’s CPU may be able to hash at around 15 kilo hashes per second). If Foundry and ViaBTC were to collude, they could take 51% of the hashrate (248 EH/s).
Foundry and Antpool together could control 69.3% of the network. Because these pools use platforms to connect pool members and manage workloads, if managers decided to take control they could issue work orders to their pools to work on the modified chain. Pool miners would have no idea which chain they are working on as their mining rigs automatically work on whatever task they are given.
Even more concerning is that these three pools also monopolize the majority of the network’s hash rates for Bitcoin Cash, Litecoin, and Bitcoin SV.
These pools have been operating for several years without problems, but the fact remains that they already control the majority of the hashing power of mineable and profitable cryptocurrencies.
What does a 51% attack do?
A 51% attack alters the blocks that are added to the blockchain, giving attackers the ability to create or modify transactions for the period they have control.
Has a 51% attack ever happened?
YES. Several blockchains have been attacked using this method, but they had small networks, were new, or had other vulnerabilities that made it possible.
How much would a 51% attack on BTC cost?
If a large mining pool were instructed by its managers to conduct an attack, it would not cost the managers much at the time of the attack. However, he would probably lose his honest miners once they found out. For a single person or group to conduct a 51% attack, they would need more than 304 EH/s of computing power. This is a huge cost considering that the fastest miner has a hash of 406 TH/s and costs more than $10,000 per unit (about 84,000 units).
The bottom line
A 51% attack is the unlikely event in which a group acquires more than 50% of a cryptocurrency network’s hashing power. These attacks happen on smaller crypto networks, but tend to fail on larger ones like Bitcoin because they are more secure.
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