Can Blockchain be Hacked? Learn About the 51% Attack

The uniqueness of Bitcoin is, its blockchain’s security and stability, or its transparent transaction ledger.

Deemed practically unhackable, the Bitcoin blockchain is supported by a sequence of checks and balances in its community: miners are decentralized and situated across the globe, nodes that contain the blockchain run software that guarantees transactions aligned with the Bitcoin system (and if not rejected), the work consensus proof says that only new blocks can be formed after acceptance from the network. The blockchain is made in such a manner that transactions are not temporary and can’t be changed.

Although there is one way to disrupt the system, and it is with a 51% Attack.

We recently published a survey on the State of Crypto Mining to get a sense of how much Bitcoin owners cared about Bitcoin mining, how they thought about the future of Bitcoin trading, and how much they think about the possibility of a 51 percent Assault. Read on for more information about what a 51% attack is, and how it could affect Bitcoin ‘s stability.

What is an Assault of 51%?

It all boils down to hashing capacity. Hashing strength, or hash rate, is the energy that miners use to accelerate numerical calculations to build blocks in the blockchain, culminating in Bitcoin’s compensation for the difficulty validating transactions in that block. The hashing speeds are usually spread throughout the network.

A 51% attack, or majority attack, occurs when one party holds over 50% of the hashing power being used to mine Bitcoin and may use the majority influence to trigger a disturbance to the network. This person, or the attacker, will be capable of censoring transactions. They could develop their own hidden blockchain and then use that hidden blockchain to interrupt the network agreement surrounding transactions by fooling the network into trusting transactions that never happened. Also, they could inhibit miners from mining by triggering long pauses between creating blocks.

What is double-spending?

If an attacker owns 51% of the hashing power, they will spend their coins twice, or purchase anything they want, and cancel the transfer afterward. For instance, if the offender intends to buy a vehicle, their Bitcoins will be exchanged as payment and drive away with their new purchase. But since they had a hashing power monopoly, they could build a false blockchain void of the transaction or cancel the transaction. The network can cancel the initial transaction based on the real blockchain on the fake blockchain. The attacker drives off with their car and coins anyway.

Are there any limitations to the attacker ‘s power?

Even if a party controls 51% of the hashing power, the damage they can do is limited because of the blockchain’s permanent nature. For starters, they will not be able to go back and undo or alter already verified transactions. Also, they cannot adjust the Bitcoin incentive for creating blocks, snatch coins from other people, or even make new coins.

How can a 51% Attack be prevented?

Maintaining the hashing capacity shared between miners (and anybody with the right equipment can be a miner), is the best way to avoid a 51% Attack. While bigger mining firms use their size to mine with thousands or even tens of thousands of machines, and although individual miners pool their resources, the Bitcoin blockchain is still highly decentralized. Bitcoin’s bedrock is its decentralized structure and consensus-based block creation. As long as the community is aware of where the hashing power is heading, it will deter attacks.

Yet, in the end, it is down to capital and size. Since hashing requires a huge amount of resources, pulling off a 51% Attack will cost tons of money (think millions of dollars). Gains can be higher simply by utilizing the hashing capacity to mine Bitcoin properly, rather than trying to circumvent the system.

How probable is 51% Attack?

It’s small, largely because of the mining ‘s intrinsic decentralization, and the sheer volume of capital and effort it will require to pull it off. Even though an attacker unexpectedly assumed 51 percent of the hash rate, the network has a set of fault-safes in effect, including protocol recoding to stop the attack. Moreover, there are too many eyes on the public blockchain that you can automatically spot any fraudulent behavior.

Bear in mind that although Bitcoin is very safe (as well as other stable, older blockchains such as Ethereum), newer altcoins may be at risk of a 51% Attack. At this stage, Bitcoin is very well-established that it will be virtually unlikely that a 51 % Attack can be achieved, and it will be challenging to maintain for too long because of the fail-safes in effect.

So long as Bitcoin adheres to the ideology of decentralization and agreement within the community, control will stay in many hands.

So are you feeling secured with blockchain technology or not? Comment below.