51% Attack

Understanding the Concept of a “51% Attack”

A “51% attack” refers to the scenario where an individual or a group of people gain control over more than half of the total mining power of a blockchain network. This control enables them to manipulate the integrity of the blockchain for malicious purposes.

For transactions to be confirmed or added to the blockchain, consensus among the network participants is necessary. However, if a malicious actor possesses the majority of the hashing or mining power, they can exploit this consensus mechanism and disrupt the integrity of the blockchain. They can achieve this by changing the order of transactions, preventing transactions from being confirmed, or even engaging in double spending.

The likelihood of a 51% attack is higher for blockchains with less hashing power, as it is relatively easier for a malicious actor to acquire the majority of computing power required. Conversely, blockchains with a larger number of miners and more resources dedicated to mining are considered safer. The Bitcoin network, for example, is widely acknowledged as the most secure blockchain due to its significant amount of hashing power.

An incident that serves as an example of a 51% attack took place in January 2019 on the Ethereum Classic blockchain, which is an alternative cryptocurrency to Bitcoin.