What Is a 51% Assault?
A 51% assault is when an individual, group, or entity good points management of 51% of a blockchain’s hashing energy, that means they’ve management over sure elements of the venture.
The strategy through which that is obtained is completely different for every consensus mechanism.
On a proof-of-work blockchain (corresponding to Bitcoin), this might be executed by buying management of the community’s mining capabilities.
However, with a proof-of-stake blockchain (corresponding to Cardano), this might be executed by controlling 51% of the staked tokens.
The blockchain is a distributed ledger, that means it’s decentralized.
Nevertheless, as quickly as an entity has greater than half of the hashing energy over the community, it’s vulnerable to a 51% assault.
How Does 51% Occur on a Technical Stage?
If a proof-of-work community is introduced with two conflicting chains, the community will select to go along with the longest chain.
It’s because the extra transactions it has efficiently accomplished, the extra probably it’s that it’s a very good actor.
Acquiring 51% of the hashing energy means which you can mine sooner than the remainder of the miners.
Which means 51% of attackers can shortly create the longest chain after which act maliciously. The community has no selection however to decide on the attacker’s chain, because it’ll be the longest.
Usually, you’ll discover that an attacker is not going to announce their blocks to the blockchain immediately. As an alternative, they’ll mine privately to create their very own blockchain. That is to allow them to get the longest chain earlier than manipulating the general public blockchain.
They are going to spend their cash on the general public community (normally for real-world property that may’t be revoked) whereas excluding these transactions from their very own model of the blockchain — making a double spend downside.
After a time frame, the attacker will announce their model of the blockchain to the community, and it’ll need to be accepted as a result of it being longer than every other chain.
That is how a 51% assault occurs on a proof-of-work blockchain. This course of could also be completely different when coping with different consensus mechanisms.
What May a 51% Assault Consequence In?
As soon as an entity has management of 51% of the community, it may possibly do a number of malicious issues that may disturb the blockchain for all contributors.
Modify Transactions
As soon as the aggressor has 51% of the hashing energy, they might modify transactions which can be validated by the community’s nodes. This could possibly be, for instance, altering the quantity despatched and even canceling a cost completely.
Reverse Transactions
Transactions that happen whereas the attacker is in energy may also be reversed, inflicting a double spend downside (one of many causes Bitcoin was created); thus, doubling the attacker’s cash.
Mining Monopoly
A mining monopoly might additionally happen because of a 51% assault.
This might occur when the attacker blocks all transactions from a miner (or group of miners) in their very own non-public community earlier than broadcasting their very own model to the community. Which means the attacker can primarily censor miners off of the community till they’re the one miner left — making a monopoly.
Sadly, this might imply the blockchain is now centralized, within the palms of a foul actor, whereas the earlier miner’s rewards stop to exist.
What Cannot 51% Attackers Do?
They might have a whole lot of energy, however they don’t seem to be God. 51% of attackers are restricted in some methods.
Transactions Earlier than They Are In Energy
Regardless of with the ability to modify, stop, and reverse transactions throughout their reign, they can’t delete or modify transactions made earlier than they get management.
Forestall Broadcasting to the Blockchain
The attacker can’t stop somebody from broadcasting to the blockchain.
It’s because miners, stakers, validators, and many others. (which the attacker will management) don’t broadcast to the blockchain. As an alternative, they’re those who approve or deny these transactions.
Steal Property
Attackers will be unable to steal property from wallets they do not management, as they can’t broadcast the transaction to the blockchain.
Change the Community’s Protocol Guidelines
Issues like adjusting block rewards, token quantities, and consensus mechanisms are hard-wired into the blockchain’s system. Historically, these points are addressed by a gentle or laborious fork. A 51% attacker can’t power via a fork.
If an attacker makes an attempt to power a fork, they’ll merely isolate themselves on the blockchain, as no different node will attain a consensus with them.
Take a look at our article on forks here.
How Do Networks Shield Themselves From a 51% Assault?
In fact, no blockchain desires to be the topic to a 51% assault, in order that they make use of a number of strategies to guard themselves.
Financially Unviable
The system that proof-of-work makes use of to discourage customers from doing that is by making it financially unviable for the attacker to take action. To ensure that somebody to acquire 51% of the hashing energy of a giant proof-of-stake blockchain, they might require an insane quantity of computing energy and, in flip, some huge cash.
This, in fact, scales with the dimensions of the community, that means smaller blockchains are extra vulnerable to those assaults.
Proof-Of-Stake
It’s simpler to realize 51% of the hashing energy on a small proof-of-work blockchain. Proof-of-stake can assist mitigate this danger, because it requires the richest stakers to place their cash on the road. Which means they might lose their tokens in the event that they had been caught being a foul actor.
For extra on consensus mechanisms, learn our article on the subject here.
Within the delegated proof-of-stake consensus mechanism, validators are sometimes voted in by the neighborhood. Which means if half of the validators on the community began performing maliciously, the neighborhood might shortly undelegated their tokens and take away them from the community.
Promotion of Decentralization
Merely, one of the best ways to guard your self from a 51% assault is by being as decentralized as potential.
Promotion of decentralization can come from the staff behind the event of a blockchain — e.g., turning down funding from huge firms that need giant hashing energy — or from the neighborhood by merely organising nodes themselves.
Has It Ever Occurred?
We have by no means seen a profitable 51% assault on Bitcoin or Ethereum, however we’ve got seen some smaller tasks fall sufferer to this assault.
Bitcoin Gold
When this venture suffered a 51% assault, it was the twenty sixth largest cryptocurrency by market cap.
The attacker secured over 51% of the hashing energy, and over a interval of days, 18 million USD of Bitcoin Gold was stolen via the attacker’s double-spending.
Verge
Privateness coin, Verge, fell sufferer to a 51% assault in 2018, which resulted in 1.7 million USD being stolen. This got here solely a month after one other 51% assault, which worn out 22% of the token’s worth on the time.
In response to each 51% assaults, the Verge staff carried out a tough fork to try to repair the exploit the attacker used.
Are 51% Assaults the Finish of Cryptocurrencies?
Each of the cash above are nonetheless alive however are considerably smaller than they had been previous to the assault. Bitcoin Gold, for instance, has fallen from being the twenty sixth largest crypto to being simply outdoors the highest 100.
Though the assaults did not consequence within the tasks instantly retiring, they did critically hurt their value, development, and status.
Nevertheless, Vitalik Buterin suggests {that a} 51% assault would “not be deadly” for Ethereum 2.0. Stating that they might assault solely as soon as earlier than they’re faraway from the community. He then pointed to this not being the case on a proof-of-work system, which could possibly be exploited over and over by the identical entity throughout a 51% assault.
Will a 51% Assault Ever Occur to Bitcoin?
Theoretically, it might occur. Nevertheless, it’s most unlikely.
Though we beforehand talked about that proof-of-work is much less safe than proof-of-stake, this largely applies to smaller proof-of-work networks.
The Bitcoin community is so giant that in an effort to receive 51% of the hashing energy, you would want to spend just over 15 billion USD.
Not solely does this change into financially unviable, however it additionally minimizes the variety of potential attackers to a small group of billionaires that would afford this kind of funding.
What Is a 34% Assault?
A 34% assault poses the identical risk as a 51% assault does. Nevertheless, it requires so much much less hashing charge to take action.
This assault makes use of Tangle, a distributed ledger that some cryptocurrencies use to wrongfully approve or disapprove a transaction, whereas solely needing 34% of the hashing energy.
Conclusion
The 51% assault is an exploit that assaults each the safety and decentralization of a cryptocurrency. When efficiently pulled off, it can lead to thousands and thousands of {dollars} being stolen and the status of a venture plummeting.
Because of the sheer quantity of sources required to carry out such an assault, it’s unlikely that we’ll see the largest cryptocurrencies fall sufferer to a 51% assault. That being mentioned, you’ll be able to by no means say by no means — particularly within the blockchain world.
This text is part of the Hashnode Web3 blog, the place a staff of curated writers are bringing out new sources that will help you uncover the universe of web3. Examine us out for extra on NFTs, DAOs, blockchains, and the decentralized future.
