What is a 51% Attack?
A 51% attack occurs when a malicious actor or group gains control of over 50% of a blockchain network’s total mining or hashing power.
This majority control allows them to disrupt the blockchain’s integrity by manipulating transaction records, altering the order of transactions, or preventing new transactions from being confirmed.
Blockchain networks rely on consensus mechanisms to confirm and add transactions to the ledger. If an attacker controls the majority of the network’s computing power, they can dominate this consensus, potentially rewriting parts of the blockchain to suit their interests, such as double-spending coins.
Why are Some Blockchains More Vulnerable?
Blockchains with less hashing power are more susceptible to 51% attacks because acquiring the required majority computing power is easier and less expensive. In contrast, blockchains with higher mining activity, such as Bitcoin, are much safer due to their extensive hashing power.
The Bitcoin network is considered the most secure blockchain in existence because of its vast and distributed mining resources.
How Much Would a 51% Attack Cost?
The cost of executing a 51% attack depends on several factors, including:
- Type of blockchain (its design and hashing algorithm).
- Hash rate (the total computing power of the network).
- Electricity costs (associated with running mining equipment).
For smaller networks, the cost of an attack might be in the thousands of dollars, whereas, for larger networks like Bitcoin, the cost can run into millions or even billions of dollars, making such attacks economically unfeasible.
Are 51% Attacks Possible on Proof-of-Stake Networks?
While 51% attacks are theoretically possible in proof-of-stake (PoS) networks, they are less likely than in proof-of-work (PoW) systems.
In a PoS network, an attacker would need to control the majority of staked tokens rather than hashing power. This requires an enormous financial investment, as the attacker would need to purchase or accumulate most of the network’s cryptocurrency, which is both costly and likely to increase the network’s security.
Examples of 51% Attacks in Crypto
- Bitcoin Gold (May 2018): An attacker gained control of over 51% of the network’s hash power and used it to double-spend coins and manipulate the blockchain for personal gain.
- Ethereum Classic (January 2019): The network suffered a 51% attack that allowed the attacker to reorganize the blockchain, reverse transactions, and steal funds.
- Verge (April 2018): An attacker manipulated Verge’s blockchain by controlling more than 51% of the network’s hash power, enabling them to create fraudulent blocks and disrupt transaction integrity.
These incidents underscore the importance of network security and distributed participation in minimizing the risks associated with 51% attacks.