In the world of cryptocurrency, security is crucial. A significant threat to blockchain networks is the Sybil attack, where one entity creates multiple fake identities to gain undue influence. This can compromise the network’s integrity and security. This article explores different types of Sybil attacks in crypto and effective solutions to mitigate these risks, ensuring a more secure blockchain ecosystem.
There are two main types of Sybil Attacks:
51% Attack
In this form of Sybil Attack, a hacker controls more than half (51% or more) of the total hash rate or computing power of a network. This compromises the integrity of the blockchain system and can disrupt the network’s operations. A 51% attack allows the hacker to modify the order of transactions, prevent transaction confirmations, and reverse user transactions to enable double-spending, thereby profiting from the attack.
Network or DAO Control
Hackers create numerous fake accounts or bots to participate in on-chain voting on blockchains and DAOs. On blockchains, hackers can control the network, execute fraudulent transactions, or attack ongoing transactions to gain benefits. In DAOs, hackers take over the DAO to manipulate voting outcomes or exploit reward distributions.
Consequences of Sybil Attacks
The consequences of Sybil Attacks can be severe, affecting the integrity of the blockchain or DAO targeted by the hacker. Potential consequences include:
Network Control
Hackers use Sybil Attacks to create a large number of fake accounts and seize control of the network, enabling fraudulent actions or network destruction.
Manipulation
Hackers can manipulate decisions within blockchain networks or DAOs, leading to disagreements and disputes within the community.
Integrity Disruption
Sybil Attacks can disrupt the integrity of the system by creating fake transactions or altering data on the blockchain.
Loss of Trust
When a Sybil Attack occurs, users may lose trust in the blockchain or DAO, leading to a significant drop in the user base.
Financial Loss
Sybil Attacks can cause financial losses to organizations and users when hackers execute fraudulent actions or take control of the network.
Notable Sybil Attacks in the Crypto Market
Ethereum Classic
In 2020, Ethereum Classic, a version of Ethereum, was attacked using a 51% attack. Hackers created thousands of fake accounts to gain control of the network and executed fraudulent transactions on Ethereum Classic. It is estimated that hackers seized 807,260 ETC, profiting over 2,800% from the initial $192,000.
Bitcoin Gold
Bitcoin Gold, a variant of Bitcoin, has been attacked twice using 51% attacks:
- The first attack occurred in May 2018 when hackers gained control of the Bitcoin Gold network for a short period and executed fraudulent transactions, stealing over $18 million.
- The second attack occurred in January 2020 when hackers controlled the Bitcoin Gold network for over 10 days and executed fraudulent transactions, stealing $72,000.
Verge
In 2021, Verge suffered significant damage from a Sybil Attack. An attacker successfully attacked Verge, deleting transaction data on the network for 200 days.
Tor
The 2014 Tor attack is one of the earliest Sybil attacks targeting P2P solutions. Hackers attacked the Tor network to obtain information about the location and identity of some Tor users. The Tor development team found evidence suggesting this was a Sybil Attack. The attacker controlled about 115 relays from a single IP address, gaining significant influence over the network and accessing sensitive information. A similar attack occurred on Tor in 2020, focusing on Bitcoin holders using Tor, where attackers controlled many Tor relays to intercept Bitcoin transactions and steal funds.
Effective Ways to Prevent Sybil Attacks
Most blockchains use consensus mechanisms like Proof of Work (PoW) with Bitcoin and Proof of Stake (PoS) with Ethereum to determine network control and mitigate the risk of Sybil Attacks. In addition to PoW and PoS, there are other consensus mechanisms with features to prevent Sybil Attacks:
Proof of Identity (PoI)
This consensus mechanism is used to authenticate identities and ensure that nodes on the network are reliable and not controlled by hackers. PoI is one of the most popular methods to prevent Sybil Attacks in blockchain.
Proof of Reputation (PoR)
Used by some blockchains like Ocean Protocol (OCEAN) and Binance Smart Chain (BSC), this mechanism evaluates user trustworthiness based on their activity history within the network. This helps reduce the likelihood of hackers using Sybil Attacks.
Other Measures to Prevent Sybil Attacks
KYC
KYC links accounts to a specific individual or business. Requiring users to undergo KYC can be a defense against Sybil Attacks.
Proof-of-Personhood (PoP) Authentication
PoP tests verify that a unique individual is behind each node on the P2P network. Instead of requiring ID information, PoP tests use AI to filter out bots. Users may have to solve Captchas or scan QR codes before interacting with other nodes.
Establish Hierarchical Systems
Creating a hierarchical system for validators in the network is another way to prevent Sybil Attacks. Long-term participants have higher authority than newcomers, preventing new Sybil nodes from launching large-scale attacks.
Use Social Trust Graphs
Social Trust Graphs visually represent all validators in the network. These graphs classify validators based on their honesty. If the algorithm detects some nodes operating incorrectly, it will lower their trust level. This helps main network operators quickly identify Sybil Nodes. Techniques like SybilRank, SybilGuard, and Advogato Trust Metric are examples of Social Trust Graphs.
Implement Costly Consensus Mechanisms
Attackers in Sybil Attacks aim to control the blockchain to extract funds. Therefore, operating an expensive consensus mechanism can effectively prevent Sybil Attacks. For example, on Ethereum, anyone needs to stake 32 ETH to run a node, which currently costs around $51,000. Thus, running multiple nodes for a Sybil Attack becomes economically unviable.
And now we have Humanity Proof
Rooted in decentralized identifiers (DID) and verifiable credentials (VC), Proof of Humanity integrates palm recognition, decentralized storage, and zero-knowledge proofs. This is a powerful mix of technologies that empower users with absolute ownership over their data and identity when performing a wide range of tasks, especially online.
Proof of Humanity runs on Humanity Protocol, a zkEVM (zero-knowledge Ethereum Virtual Machine) Layer-2 blockchain.
Proof of Humanity (PoH) stands out as an effective tool for enhancing security and building trust in digital interactions. It enables the verification of users as real humans, rather than bots or automated systems, while protecting their privacy and safeguarding sensitive information. By confirming genuine human presence, PoH ensures integrity and authenticity across online platforms.
Join the waitlist of Humanity Protocol now for early access now:
https://www.humanity.org/?ref_id=IOXGIFW1E
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More detail about Humanity Protocol you can find with official link below:
