51% Attack

What is a 51% Attack?

A 51% attack, or majority attack, is an event that occurs when a single entity or a group of entities collectively controls more than 50% of the consensus power in a blockchain network.

What is a 51% Attack?

A 51% attack is an attack on a blockchain network in which a single entity or a group of entities controls more than half (51%) of the network's storage or computing power. This disproportionate control enables the attacker to make fundamental changes, thereby violating the fundamental principle of decentralization in blockchain. In other words, a 51% attack grants the ability to rewrite the transaction ledger, prevent transactions from being finalized, and halt validator rewards.

How does a 51% Attack happen?

There are several mechanisms attackers use to carry out a 51% attack, but there are general stages and steps attackers take to prepare for execution. The process begins by amassing hashing power equal to more than 50% of the network's by procuring massive amounts of hardware or by convincing a large number of miners to join the attacking team. The attacking team then begins the process of splitting the network by continuing mining operations without sharing any updates with the original network of miners, which results in two versions of the project's blockchain operating in parallel and separately.

Thanks to the computing power acquired by the attacking team, they begin mining separately and faster than the rest of the miners on the original network, thereby increasing the size of the attackers' blockchain, and when the attackers reconnect to the cryptocurrency's blockchain network, and due to the length of the attackers' chain, everyone switches to the attackers' chain because the network accepts the longest blockchain.

In conclusion

Any emerging technology, including blockchain and cryptocurrencies, is vulnerable to a variety of risks and weaknesses. Although new technologies promise to address these shortcomings, hacking attempts remain a possibility. On the positive side, however, these attacks provide valid reasons for the industry and companies to learn and improve.

Related Term: Hash Power is a unit of measurement for computing power used by cryptocurrency networks, it represents the number of mathematical operations that mining devices can solve per second to add new blocks and secure the network.

Compliance disclaimer

Warning: investing in cryptocurrencies involves significant risks, and you may lose some or all of your capital. This content is for educational purposes only and is not an investment recommendation. Consult a licensed financial advisor before making any investment decisions.