In the cryptoworld, security is one of the most important points. That being the case, there are few things that can scare this community when it comes to this point. However, there is a possibility that not only scares, but also puts in doubt for many the total security of the Blockchain technology. This possibility is known as the 51% attack. In the present article we will explain a little about it. We hope it helps.
We can understand the 51% attack on the possibility in PoW consensus mechanisms (although it could also happen in the PoS) that a person or group of people acquire control over the computing power of 51% of the network of a Blockchain. These people would be miners, whose nodes would have the computing power necessary to control more than half of the network of transactions of a cryptocurrency.
Being that the miners are those who use their computing power to verify transactions and keep the cryptocurrency system safe, since only one person has this power, they can approve a transaction without having to go through the rest of the nodes. This power can lead to unfavorable alterations for the network and its technology, as well as for the rest of the users of said cryptocurrency.
The way a 51% attack works is simple. The attacker or attackers who possess such computing power begin to compile a secret and private version of the blockchain. While doing this, they send a number of cryptos in the public Blockchain, where they can send cryptocurrencies from one Wallet to another or request it to be sent to a bank account. However, according to the secret version of the Blockchain, this exchange never happened. When the attacker obtains the fiat money or the number of cryptocurrencies that he required, he converts his private version into the public version, so he keeps his cryptos.
Thus, the attacker has the possibility to secretly mine their own blocks, end up with more blocks, create a longer chain than the public one, duplicate false transactions, block legitimate transactions, among others. Thus, it would benefit from the actions of the Blockchain, or affect the optimal development of the rest of the members.
There are several consequences that a 51% attack can bring on a person. The first of these may be that the mining process is accelerated for the attacker, and that is why he can obtain all the rewards of the Blockchain, and being the first to complete and verify all the blocks in the chain. This way, it could not only reduce the reward percentage of the other miners, but it could also prevent others from mining.
Another consequence of this attack is double spending. This is just the example we gave earlier, where the attacker makes expenditures in the public Blockchain that he won’t include in his private version, and when converting his version as the public, he keeps his purchase and the cryptocurrencies he used. It could also reverse transactions or prevent them from being confirmed, and the price of the cryptocurrency can be considerably reduced or even eliminated.
Many pages have been dedicated to the study of the profitability of this type of attacks. In the case of the strongest cryptocurrencies, such as BTC, ETH or LTC, it is not profitable to carry out a 51% attack, being that the price to be paid for Internet cost (which would be excessively high due to the number of nodes required for obtain 51% of computing power) would be many times greater than the possible reward obtained. This is because each block takes an approximate 10 minutes to be mined, and the reward for this attack would be low and the costs high.
However, many argue the possibility that these attacks if they are profitable in the cases of lesser-known cryptocurrencies, and lower entry into the market. Examples of this have been Verge and Bitcoin Gold, which are just two examples of those small crypts that have suffered 51% successful attacks and that have made their community suffer. If you want to know the possibilities of or costs of these attacks (in case of renting computing power and not obtained in an organic way), you can enter Crypto51.app.
Even when there have been cases of attacks of this type in cryptocurrencies, the probability of this happening is low, since the same cryptocurrencies act in the matter and try to diminish the chances of these happening. Making an attack on the Bitcoin Blockchain would cost USD $ 1 million, and the reward wouldn’t reach this number, in addition to the programmers could discover the attempt of an attack in seconds or minutes, and this makes it almost impossible for someone to even try to perform this type of attacks.