Read on to find out what a 51 percent attack is and what exactly can mean for a blockchain network!
What Is A 51 Percent Attack?
A 51 percent attack, also known as a majority attack, is a situation where a malicious entity gains control of over 50% of the blockchain’s hashing power, which gives them the ability to control the network and manipulate it to their advantage.
What You Need To Know About 51 Percent Attacks
The main risks associated with a 51 percent attack in crypto include:
- Control over crypto operations. An attacker may be able to block new transactions from being confirmed, change the order of new transactions, and even reverse their own transactions via a double-spending process.
- Reputational damage. A 51 percent attack can affect the credibility of a cryptocurrency, making it less attractive to investors and decreasing its value.
- Network disruption. A majority attack can cause significant financial losses and disrupt the network’s operations by slowing down transactions or making it difficult for users to access their funds.
One example illustrating the 51% attack definition happened on the Bitcoin Gold network, a hard fork from Bitcoin, in 2018. The attack resulted in the theft of over $18 million worth of BTG.
On the bright side, fraudulent players conducting a 51% attack are unlikely to be able to steal crypto holdings from other accounts or generate new coins. What’s more, the larger and more popular a cryptocurrency is, the less likely it is to be vulnerable to a 51 percent attack.
This is because larger networks have a higher amount of computing power, making it a lot more difficult for a criminal to gain control. As a result, despite the potential attacker’s resource allocation, the frequent addition of blocks to the chain would provide a limited time frame for transaction manipulation.
This means that even though large blockchain networks like Bitcoin and Ethereum aren’t 100% safe from such type of malicious activity, the costs of a 51% attack on either of them would far outweigh any possible benefits.
