Although backed by blockchain technology that promises security, immutability and complete transparency, many cryptocurrencies, such as Bitcoin SV BSV, cost $38.97, Litecoin Cash (LCC) and Ethereum Classic.
ETC$20.02 has been subjected to multiple attacks from 51% in the past. While there are many mechanisms by which malicious entities can and do exploit blockchains, a 51% attack, or majority attack as it is also known, occurs when a pool of miners or an entity has more than 50% of the power of the blockchain controlled. Hash the blockchain and then take control of it.
Possibly the most expensive and lengthy way to compromise a blockchain. 51% of attacks were largely successful on smaller networks that require less hashing power to traverse most nodes.
Understanding a 51% attack
Before delving into the technique of a 51% attack, it is essential to understand how blockchains to record transactions, validate them, and what various controls are built into their architecture to prevent tampering. Using cryptographic techniques to connect subsequent blocks, which in turn are records of transactions that have taken place on the network, a blockchain adopts one of two types of consensus mechanisms to validate each transaction through its network of nodes and record it permanently.
A Proof-of-Stake (PoS) blockchain needs nodes to invest a set amount of the native Token in obtaining validator status, in contrast to a Proof-of-Work (PoW) blockchain where nodes must solve challenging mathematical puzzles to verify transactions and add them to the blockchain. In any case, a 51% attack can be orchestrated by controlling the network’s mining hash rate or more than 50% of the tokens stacked on the blockchain.
To understand how a 51% attack works, imagine that more than 50% of all nodes running these validation functions are conspiring to introduce a different version of the blockchain or a denial of service Attack (DOS) to execute. The latter is a 51% attack type where the remaining nodes are prevented from performing their functions while the attacking nodes add new transactions to the blockchain or delete old ones. Either way, attackers could reverse transactions and even double-spend the native crypto token, like creating fake currency. Such a 51% attack can compromise the entire network and indirectly cause enormous losses for investors holding the native Token.
Although creating a modified version of the original blockchain in the case of large blockchains like Bitcoin or Ethereum requires excessive computing power or staked cryptocurrency, it is still possible for larger blockchains.
Even a DOS assault has the potential to severely impair the blockchain’s functionality and hurt the value of the underlying cryptocurrency. However, it is unlikely that transactions older than a specific limit can be reversed; therefore, only the most recent or future trades will be placed—facts on the network at risk.
How to detect and prevent a 51% attack on a blockchain?
The network mining hash rate or the total number of tokens staked. Repeated attacks on Bitcoin Gold indicate the importance of relying on ASIC miners rather than cheaper GPU-based mining. Because Bitcoin Gold uses the Zhash algorithm, which allows mining even on consumer graphics cards, attackers can afford to launch a 51% attack on their network without investing much in the more expensive ASIC miners. This 51% attack example underscores the superior security controls that ASIC miners offer, as they require a higher investment and are specifically designed for a specific blockchain, making them useless for mining or attacking other blockchains.
In addition, the cost of an attack can be drastically reduced by 51% as service providers like NiceHash allow people to rent hash power for speculative crypto mining. This has drawn attention to the need to monitor real-time chain reorganizations. On blockchains to highlight a 51% continuous attack. MIT Media Lab’s Digital Currency Initiative (DCI) is one such initiative, which has created a system to monitor several PoW blockchains and their cryptocurrencies actively and report any suspicious transactions that may have double-spent the Token. Attack. Cryptocurrencies like Hanacoin (HANA), Vertcoin (VTC), Verge (XVG), Expanse (EXP), and Litecoin Cash are just a few examples of blockchain platforms that have faced a 51% attack as reported by the DCI Initiative.
Of these, the July 2019 Litecoin Cash attack is a classic example of a 51% attack on a proof-of-stake blockchain, despite the attackers not mining any new blocks and spending twice as much Litecoin Cash (LCC) tokens that were worth less than $5,000 at the time of the attack. This underscores the lower risks of 51% of attacks against PoS blockchains, as they are less attractive to network attackers, and is one of the many reasons more networks are switching to the PoS consensus mechanism.