Coding compiler – What is a 51% attack? Like any other system, Bitcoin is not perfect. In the context of possible risks, there is often talk of a so-called 51% attack. This tutorial will explain what an attack is, what it can do and how to prevent it.
What is a 51% Attack
Be your own bank is one of the best-known slogans of the Bitcoin community. But such a claim neglects that a possible decentralization of the banking system is accompanied by a massive decentralization of responsibility.
Accordingly, decentralization requires enlightened and critical users who are aware of the dangers of possible attacks on the blockchain. Among the most frequently discussed dangers, a so-called 51% attack is often counted.
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How does a 51% attack work?
The Bitcoin infrastructure consists of the users (more specifically their wallets), different user interfaces, the miners and the nodes. The nodes are responsible for maintaining the Bitcoin network and managing transaction traffic. Nodes guarantee that all transactions comply with the rules. The job of the miners is to group transactions into blocks and attach them to the blockchain.
In the notorious 51% attack, the following scenario occurs: an attacker succeeds in putting over 50% of the miners. If you take a look at blockchain.info, you can see that three of the large mining pools (Antpool, F2Pool and Btcc Pool) currently account for more than 50% of the hash rates – the concern is not purely hypothetical, but quite real. In other Altcoins such attacks have already occurred in the past.
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So what could happen if an attacker poses over 50% of miners? To clarify this, one look at Satoshi Nakamoto’s whitepaper helps: in Section 11, he looks at the problem of an attacker who wants to feed wrong blocks into the system. Ultimately, one can calculate how likely it is that an attacker enforces his Blockchain.
It is easy to see that if the attacker’s hash rate is greater than or equal to that of the opponent, the probability of changing things is one. This means that someone with more than 50% of the hash rates on his side would have incredible power.
The above formula would then always be decided in his favour. Also, keep in mind: even though the attack is called 51% attack and suggests that you need more than fifty percent of the hash rate for the attack, you can see from Nakamoto’s formula that with less control, the likelihood of the attack is increased Success of an attack is smaller, but success is not excluded. Accordingly, such an attack may also be successful with significantly less than 51% of the hash rates.
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Possibilities of the 51% attack – what an attacker could do
As long as the attacker is in control, he could do double-spending transactions. This means that he could reverse transactions and transfer them elsewhere, completely messing up the Bitcoin ecosystem. He could prevent as many transactions as possible or give them no confirmations.
For example, the attacker could selectively block certain payments and thus deactivate individual subscribers. He could stop any number of Miners from mincing any valid blocks and instead pocket the Rewards for himself.
The examples show that the potential damage that such an attack can do is immense. Accordingly, the danger of such an attack should be taken seriously.
What can you do about it?
The advantage of Blockchain is that everything is transparent and observable for everyone. Right on Blockchain.info you can see which mining pools found which blocks. Of course, this is not an antidote, but it may help to see if there are mining pools that contribute significantly more blockade of blockchain.
Apart from that, however, it is difficult in the case of Bitcoin, as an individual to do something against the attack. However, if the case of such an attack occurs, it is recommended for each user to increase the acknowledgements of a transaction to guard against duplicate transactions.
Should an attacker really have 50% or more of the hash rates, this would not change the fact that the blockchain version of the attacker would always prevail, but it would bring important time. Time, which is valuable because Bitcoin is incredibly expensive to maintain 51% of the hash rates.
From the perspective of Gavin Andersen, who coined the idiom “That would be bad” with a view to a 51% attack, it is relatively easy to defend against such an attack from the developer’s point of view.
An idea would be that the attacker would ultimately not only have a lot of hash rates, but also a lot of bitcoins from before the attack. Overall, this would not only make the 51% attack pretty expensive but also make sure that the attacker bleeds quickly.
In summary, a 51% attack on Bitcoin is a serious affair, but it can be uncovered. Especially in prevention Bitcoin users have an important role to play: it is up to them to keep a close eye on the entire network.