Blockchain technology is one thing that makes bitcoin better than fiat, government-issued currencies. Blockchain technology is a digital record whose data can’t change or modified. This minimizes the possibility of double-spending or transactions using the same Bitcoin more than once. Blockchain technology means no one can fake bitcoin transactions. However, it does not rule out that there is a group of people who are not aware that many people own some of an asset, they can attack as much as 51% of that ownership.
Blockchain technology has become a popular way to collect transactional data. Blockchains is safe due to its openness. It can also monitor for data manipulations. But is blockchain secure?
Despite security being extremely strict, there are still 51% attacks or 51% attacks. What is the 51% attack, and how can it happen?
Definition 51% Attack
51% attack is a type of attack on the cryptocurrency blockchain. These attacks often conduct on Bitcoin and an often implemented by miners who control over half of the network’s hash mining rate.
This can occur when one or more miners can take control of a large Proof of Work-based blockchain. By doing this, some attackers can prevent new transactions that could use for confirmation. The delay in confirming payments can cause them to stop. They can cause double-spending and change transactions that’s already complete.
Double-spending can describe as a situation where the digital currency within the blockchain has duplicate or counterfeit. The maximum amount of coins or tokens created by forgery or duplicate use is 2x. Token may only use once. In this way, the network operating mechanism will disrupt.
Have 51% Attacks Ever Happened?
The answer is yes, but not always. In July 2014, the well-known GHash.IO mining pools had exceeded the 51% limit. It led to the Bitcoin mining rate. The terror began to overwhelm the bitcoin community. Peter Todd, a top bitcoin developer, and investor decided to sell half of his assets in response to the pool’s growing size.
The 51 percent attack information caused the bitcoin price to drop from USD 633 – USD 600 within a short time. GHash.IO published a confession promising to keep the mining pool below 40% of bitcoin’s hash rate. Representatives of GHash.IO asked the other miners in the community to help set a good example.
He called for a new committee to be set up to protect against the 51 percent attack. This committee will comprise representatives from mining firms, Bitcoin businesses, or other specialists.
How Does the 51% Attack Function?
To perform 51% attacks, you can create two distinct blockchains. Blockchain technology will broadcast new blocks that have a mathematical or hash solution once they have been solved. If a miner or group of mining workers controls more than 50% of the computing capacity, they cannot publish their hash.
Due to two blockchains, miners who need to manipulate data may enter Bitcoin transactions on a new version. They can use Bitcoins to buy any item. They can use Bitcoin to buy an item before the Bitcoins are confirmed.
Blockchain mining holds the notion of democracy in its grasp and follows most of it. All miners will see the longest chain in a blockchain as the correct.
51% of attackers are required to continue verifying new transactions to trick other miners. They also need to race to create more blocks and be competitive with the original blocks. This effort is very energy-intensive and nearly impossible to accomplish on a large network, such as Bitcoin.
How to Prevent 51% of Attacks from Happening?
Yes. The only way to prevent 51 attack on the network is decentralization. The network will be protected as long one substance does not control more than 50% of mining power.
The 51% probability of an attack on the Bitcoin network is almost impossible. To achieve this, a miner (or a group of the miner) will need tremendous computing power. They have to conquer millions upon millions of bitcoin miners from around the world. A miner would need billions worth of equipment to utilize such a vast hash capability.
Supercomputers cannot be used to mine Bitcoin. It’s also difficult and expensive to run, so the 51% Attack led to losses for group miners.
A 51% attack against a network is not possible, especially with the Bitcoin blockchain, the most secure cryptocurrency network. It’s very difficult for attackers to gain control over other Bitcoin networks, but it is possible with smaller cryptocurrencies. Altcoins possess a smaller amount of hashing potential than Bitcoin. Monacoin (Bitcoin Gold), ZenCash, and ZenCash all fall prey to this attack.