51% Attack – Crypto Glossary Definition:
A 51% attack, also known as a majority attack, is a security threat to blockchain systems wherein a single malicious entity or a coordinated group gains control over more than 50% of the total hashing power within a blockchain network. This level of control provides the attackers with the ability to manipulate the blockchain’s integrity and disrupt its normal operation.
In a 51% attack scenario, the malicious actor(s) can:
- Modify Transaction Order: The attackers can intentionally alter the order of transactions, potentially preventing certain transactions from being confirmed, leading to a transaction denial of service.
- Double-Spending: By controlling the majority of hashing power, attackers can double-spend cryptocurrency coins. This means they can initiate a transaction, receive the cryptocurrency, and then reverse the transaction to spend the same coins again. Double-spending is a fundamental concern that consensus mechanisms like proof-of-work aim to prevent.
While a 51% attack allows for significant manipulation of a blockchain, it does have limitations:
- Limited Control: Attackers cannot prevent transactions from being broadcast or reverse transactions from other users entirely. Creating new coins or stealing coins not belonging to the attacker remains improbable.
- Difficulty in Subverting Transactions: The further back a transaction is in the blockchain’s history, the harder it is to manipulate, as it would require mining numerous new blocks to reach the current block height. Bitcoin transactions, for example, typically require a threshold of six confirmations before they are considered valid.
A successful 51% attack depends on acquiring a majority share of a blockchain’s mining power, and the feasibility of such an attack varies depending on factors such as blockchain size, hashing algorithm difficulty, electricity costs, and available hash rate.
Large and well-established blockchain networks, like Bitcoin, are highly resistant to 51% attacks due to their extensive participation and robust security. Smaller or less-secure blockchain networks may be more susceptible to such attacks.
To mitigate the risk of 51% attacks, blockchain networks encourage increased participation, utilize consensus mechanisms like Proof-of-Work (PoW) or Proof-of-Stake (PoS), and promote decentralization by distributing nodes across diverse locations and participants.