The Only Way To Compromise Blockchain. Is It Even Possible?
What if I tell you that the Blockchain can be compromised, you can actually get a hold of transactions made in Blockchain!! What will your reaction be?
Well, today in this article I’ll shed light on the method by dint of which Blockchain can be hacked, its possibilities, what can be achieved through it, and why it is said to be impossible to meddle with blockchain.
First of all, let us see why taking over the Blockchain is non-viable
The distributed way of building and verifying data is the key strength of Blockchain Technology. Blockchain being decentralized in nature runs on various servers or nodes that are spread all over the world. The proof-of-work consensus algorithm assures that the miners can validate new blocks only if the nodes collectively agree on the authentication of that block.
Each cryptocurrency has a different blockchain and has thousands of active nodes continuously monitoring it. So to be able to completely control a blockchain the person needs to ingress all the servers or nodes at once, which is pretty unfeasible.
“TO TAKE OVER BITCOIN BLOCKCHAIN YOU NEED TO HACK 150,000 SERVERS, ALL AT ONCE”
The next most appealing method is the 51% Attack, or the Majority Attack. Although this method has been proved theoretically, it is practically impossible to perform.
If a person acquires over 50% of the hashing power available on the blockchain, he can effectively control the blockchain.
The use of heavy equipment to elevate the chances of getting rewards seemed to favor only the rich, hence, some miners decided to team-up and form so-called ‘mining pools’ combining their hashing power and distributing the rewards equally. This strategy proved to be effective, encouraging more and more miners to join together. This was seen as the first major threat in the history of blockchain. If the three biggest mining pools decide to merge together, they would dominate the network and could start approving fraudulent transactions.
However, this case is subjected only to the Proof-of-Work (PoW), whereas in Proof-of-Stake (PoS) one has to possess more than 50% of the total market cap of that particular asset. Considering Bitcoin, acquiring 51% of it would set you back a whopping $79 Billion. This makes the 51% attack impractical and should explain to you the upper hand that PoS has over PoW.
So is that it? If someone somehow manages to get a hold of 51% hashing power, can he actually do anything?
A Big ‘NO’- Even if someone manages to get a hold of more than half of the hashing power, it opens limited access for the attacker. That’s why Blockchain is entitled to be the safest and most secure technology ever made.
“EVERYTHING ON THE INTERNET IS AT LEAST 100 TIMES EASIER TO HACK THAN A BLOCKCHAIN”
The attacker having enough mining power can intentionally exclude or modify the ordering of transactions, can also retract the transactions that nodes (in his control) make, leading to a double-spending problem. A successful majority attack can also allow the attacker to prevent some or all transactions from being confirmed or prevent miners from mining, resulting in what is known as mining monopolies.
📌 On the other hand, the attacker cannot:
❌ Reverse the transactions verified by the rest of the nodes.
❌ Restrict transactions from being created and broadcasted in the network.
❌ Change the block rewards.
❌ Produce new coins out of thin air.
❌ Or steal coins that never belonged to the attacker.
Since a blockchain is maintained by a massive nexus of nodes spread globally, they cooperate in the activity of approaching consensus. The bigger the network is the stronger is the shielding against attacks and data corruption. Therefore, a 51% attack on any Blockchain is rather unlikely owing to the magnitude of the network.
Also, changing the formerly verified blocks gets more and more onerous as the chain grows. The blocks are associated with each other hence it only possible to change a certain block if all subsequently confirmed blocks are discarded. For the same reason, the more confirmations a block have the higher the costs for altering or reverting transactions therein. Hence, a successful attack would probably only be able to modify the transactions of a few recent blocks for a short span of time. Even if a malicious entity is not motivated by profits and manages to successfully perform a 51% attack, the Blockchain protocol would be quickly adapted as a response.
In short, blockchain still remains the safest technology to the present date.