What is a 51% attack?

A 51% attack is perhaps the most discussed threat to any public Blockchain. Since Ethereum had another 51% attack (the second within a week of the first), It is probably timely to write about these sad things.

What is a 51% Attack?

If more than half the computer power on a network is run by a single person or a single group of people, then a 51% attack is in operation. This means this entity has full control of the network and can negatively affect a cryptocurrency by halting mining, stopping, or changing transactions, and reusing coins. (thank you goes to free-crypto.net)

A miner utilizing a 51% attack can:

  • Double spend coins.
  • Thwart transactions from being confirmed.
  • create the longest chain to show the most proof of work

A miner utilizing a 51% attack cannot:

  • Reverse confirmed transactions.
  • Create false transactions.
  • Steal funds from individual addresses.
  • Create any new coins.

Double Spending

Here’s how a 51% attack utilizes double spending:

To carry out his fraudulent attack, this “perp” first sends cryptos to person ‘A.’ At the same time, the “perp” sends those same cryptos to person “B.” The cryptos sent to person “A” show on the blockchain. The “Perp,” who has massive *hashing power, covertly mines blocks for the **double-spend transaction to B, and hiding it from the network.

*Hashing Power = rate of speed blocks are created

**double-spend = a potential flaw in cryptocurrency systems referring to the risk that digital currency can be spent twice.

The “perp” will get a few confirmations on the public blockchain for person “A” then, before they get paid, will present After a few confirmations on the public blockchain where transaction A is valid, the attacker presents to the network his hidden mined blocks, where transaction B is valid. Since he has so much mining power, he can create longer blocks than the original and can validate his blocks.

What happens then? The funds the “perp” sent to person “A” canceled because it does not appear on this new, longer blockchain. The “Perp” likely has the service he paid for from person “A,” and they have a big fat 0 for their trouble!

The result: A ends up with no money, and the attacker may have already gotten the service for which he paid.

Blocking Transactions

Those who control the most hashing power can control which transactions to include in the next blocks. Therefore, a “Perp” can decide to create empty blocks, with no transactions!

Currency Risks

A 51% attack could effectively destroy the cryptocurrency that it attacks. WHY? The public would lose trust in the network, and a significant sell-off would plummet the value as owners started to dump their holdings.

Satoshi would never have seen the problem of the 51% issue and someone having the ability to control and influence the blockchain probably because Satoshi didn’t anticipate the rise of ASIC’s and huge mining pools.

How do you Prevent a 51% Attack?

The decentralization of miners helps prevent a 51% attack. The network is safe as long as no one single entity has control of the mining hash power.

The Bitcoin blockchain being very robust, is considered inherently safe because it would take a vast amount of money to gain 51% of the network’s mining power.

It is reassuring to remember that a miner with so much mining power would most likely make more money using this power to mine legitimately than to take the time to block transactions and do double-spending. This fact dramatically reduces the risk of a 51% attack substantially.

Experts’ Opinion on a 51% Attack

Andreas Antonopoulos

Andreas Antonopoulos – is a distributed systems expert and a worldwide evangelist for Bitcoin. Watch his video on Youtube.com to see what he has to say about these 51% attacks. I am sure you will enjoy it!

Gavin Andresen

Gavin speaks about the 51% attack and some aspects of dealing with it on his blog (gaventech on Blogspot.com) The lead developer of the core Bitcoin and Former chief scientist, Gavin Newsome, wrote back in 2012 and predicted that miners on a network would quickly figure out a way to stop the 51% attacks.

According to Gavin Andresen, just adding a simple line of coding could be added to Bitcoin, which would quickly stop a 51% attack.

Gavin’s Thinking is as follows:

“…Ignore a longer chain orphaning the current best chain if the sum (priorities of transactions included in the new chain) is much less than sum (priorities of transactions in the part of the current best chain that would be orphaned) would mean a 51% attacker would have to have both lots of hashing power AND lots of old, high-priority bitcoins to keep up a transaction-denial-of-service attack. And they’d pretty quickly run out of old, high-priority bitcoins…”

An attacker could fake the transactions but only for a limited time. Andresen’s hypothetical code would reject the fraudulent blockchain built by the attacker. The Bitcoin network would return to the working order within a couple of hours.

As Andersen explains on his blog (gaventech on Blogspot.com), changing rules can also be detrimental and have its own repercussions:

The devil is in the details, of course, and the risk of introducing a new chain-acceptance rule (high) has to be weighed against the chances that somebody rich and irrational will try to pull off the attack (low, in my opinion, but maybe I’m not sufficiently paranoid about Big Banks or Big Government using Dirty Tricks to shut down Bitcoin). Maybe I’ll code it up and keep it as a ‘Not To Be Used Except In Case of Emergency’ branch. “

It is evident that Andersen doesn’t see a 51% attack to be a severe threat to the Bitcoin Blockchain, and believes the simple addition of coding can easily combat it.

Historical 51% Attack Cases

In an attempt to stop an unknown attacker from stealing coins while the Bitcoin Cash network forked, two Bitcoin Cash mining pools (BTC.com and BTC.top) attacked the Bitcoin Cash Blockchain. Even though it could be said the 51% attack carried out to help the Bitcoin Cash network, it still exposes the power these two mining pools have on the system.

Ethereum Classic (January 2019)

Coinbase halted all ETC transactions when they found a “deep chain reorganization” of the Ethereum Classic (ETC) blockchain and a double spend on January 5th of 2019. Another exchange, Gate.io, also confirmed that it had picked up at least seven double spend transactions when it conducted its investigation of the attack.

Vertcoin (December 2018)

There were four different attacks on the Vertcoin network (a relatively small network which ranks below #200 in the cryptocurrency charts.) Still, the theft of around $100,000 is not insignificant at all.

Bitcoin Gold (May 2018)

More than $18 million stolen through double spending in a Bitcoin Gold 51% attack conducted by an unknown malicious actor. Exchanges tried to fight off the attack by waiting for a more extended confirmation time before approving transactions, but that did not seem to help a lot.

Bitcoin (January 2014)

In January of 2014, Gash.io, a mining company, got so large that it neared 51% of the total mining power, sending panic through the community. Any issues were avoided, however when a few miners left the pool to balance things out. Also, the pool limited its operations to no more than 40% to prevent future problems.

Feathercoin (June 2013)

A Litecoin clone known as Feathercoin had a 51% attack where 16,000 coins were double-spent. This coin ranked reasonably high on the Cryptocurrency charts back then.

A 51% attack could pose a risk perhaps but most especially to a young blockchain if they don’t have diversification to their hashing power. This is reason enough that altcoins should take heed to protect themselves. It gives great comfort to know that the “big” guys always watch for any signs of trouble.

About the author

Gail holds one of the most challenging role in the Compumatrix Leadership: Membership. She ensures that that members and potential members enjoy the benefits of being part of the Compumatrix community.

Comments

  1. Thank you Gail, you have the most interesting posts. Thank you for all your great leadership. Every.time I think I’ve never heard of something, I learn a new thing I’ve never heard of. So Thank you for spreading the great information, this is a very interesting read as well.

    1. Thank you, Gail. It answer a lot of questions that I was only able to ask myself. When you are not too familiar with certain subjects its hard to throw out a question so I keep most of my conerns of cryptocurrency to myself. There were a few online mining programs that all of a sudden seem to down size, and or disappear off line with no explanation and this information answers a lot.Good job.

  2. Thank you, Tracy! I’m really glad you enjoy reading and learning from these blogs is a plus to me for sure! If you get a chance maybe you can do a search for Andreas Antonopoulos on youtube.com and find his video on 51% attacks. The video is short but very good as he explains things is such a simple way it’s enjoyable listening to him.

  3. Thank you I will do that, I also signed up for the 99bitcoins and I love the videos. Thank you for posting about this earlier. I am enjoying being home now. Being furloughed only helped me jump deeper into Compumatrix and I love it.

  4. I liked this article very much. This is great depth in the information provided by you. Will certainly keep us more aware and alert. How could we ever imagine that the miners could be so intensive in their attacks.
    Very educative and important for us to know. I am looking forward to your next blog .Thank you ,Gail.

  5. Thanks Gail. Your Blog is very informative as usual. I had never heard of this before. I will be more alert than ever now. It is good to know that they can not steal from individual addresses or create any new coins. Hopefully miners are too busy mining coins and will not try the 51% attack.

  6. extremely informative blog Gail — will read several times have to — to grasp all that is in this — especially on ethereum and to see more and more on how significant the Decentralization factor actually is — i keep gaining info and good knowledge and thank you so very much for not stopping your sharing of your expertise —

  7. This is very interesting information Gail. For me this is new. I never heard of a 51% attack. I learn every day more and more about the cryptos what is happening in this fascinating world. This Compumatrix blog and your blogposts help a lot. And it surely will help to understand better what Compumatrix is about when the doors will open one of these days.

  8. Thanks Gail, another interesting blog as usual .. I will surely do a search for Andreas Antonopoulos on youtube.com and find the video on 51% attacks.
    I try to read as much as I can and to understand all what goes on in the Crypto Currency world I now find my self involved in .

  9. Everytime I read one of your blogs, I seem to realise how much there is to learn. You provide an insight into areas where we might have missed bits of news and knowledge and I thank you for that. I’ll go ahead now and do some of my own research as you’ve suggested in other comments through YouTube.

  10. I take it a part of our nodes situation will take care of this for us? I do not see this being a big problem for Bitcoin anymore but I still have my concerns regarding Ethereum. I think this coin is in trouble due to the amount of control that exists right now. The potential is there for it to be a valuable asset but my concerns are heavy on its future.

  11. Thanks Gail, you just sold another fine detail for decentralization! I also enjoyed the blockchain group of miners that saw the need to keep the majority risk to a minimum, showing the system works and the checks help. I am so enamored at what some people will do to help others or a system to succeed while others work to destroy a good thing for all, so sad! Decentralization is the true way of the future of finance, once the world wakes up to actual facts.

  12. Wow there are always people who use their intelligence and knowledge to work for the dark side! Perhaps it is a challenge for them. Now if I hear the term 51% attack, I have a bit of learning to be able to say, yes I’ve heard of that and experts say there are systems and coding in place to handle that, but can still be detrimental in that for several hours people are being affected before it is stopped. (If I’ve got that right)

  13. Thank you Gail, I just can’t get that word “Perp” out of my head now.
    I am very grateful that we have such knowledgeable people in the ‘compumatrix’ family as so many of us are going into a new way of thinking and a new way of using funds. However, even with the security worries of working online, I feel it that as long as we are aware and take responsibility for our security online, we will be fine.

    I am always grateful to learn a little more about what is out there…I do feel less of a novice each week that goes by.

  14. Wow Gail that is a scary scenario. It sounds like Bitcoin and the decentralisation thereof, might be able to ward off some of these attacks. Hopefully as we begin to grow our Compumatrix business we will have to study all of our tools on best practices when trading and doing our daily business routines. Thanks for the update on 51% attacks.

  15. Gail, I appreciate the high-quality educational blog posts you continue to publish! The 51% Attack is a phenomenon that I have read about in the past. It resides in the back of my mind under the category of minimal concerns about Bitcoin.

    Your article re-enforced my understanding about the potential for this happening to Bitcoin is low, which is comforting. Andreas Antonopoulos is one of my favorite sources for credible Bitcoin information. I will find his video on 51% attacks, as you have suggested.

  16. It always amazed to see how criminals invent new and more sophisticated means to harm people. First, there is an attack and as a response, the software is updated but the criminal does the same and there is another attack. Will this ever stop? Will there come a day that software and applications are so smart that attacks are impossible?

  17. This is great information to know it is a shame some people have to turn something good into negative with there criminal acts. I like your outline with the cans and cannots so much detail excellent blog enjoyed reading about all the different strategies, kind of shocking at the end there I had no ideal there were so many involved and having this problem.

  18. Wow Gail, once again you come up with another great blog. Looking at the title did not leave me with the desire to go there but as always, I want to see what gems are there for the taking. I was not disappointed as I was held captive from start to finish. Don’t know how you put such informative blogs together with so much on your plate from your Compumatrix workload and from the garden lol. Great post and as always very educational.

  19. Gail, this is one of your best blogs so far. Each blog has such a vast earning curve within it, which helps us all understand the crypto world a little better. The world is full of good and bad people who look for a way to beat the system. We must all be knowledgable enough to ward off these criminals.

  20. so very worth the reading again and there is so much in this posting and then replies also further enhance the learning — just appreciate more the fact that Bitcoin is decentralized and we here are under that same decentralized thought process and –unfortunately it is factual if there is some way for some to just take they will devise a plan to steal what others work for — great stuff thank you —

  21. Once again, I am amazed at the lengths some will go to to try and outsmart the system..I am not sure, but I think many of them are not as concerned about the money they will gain by illegitimate means, as by the thrill of being smarter than, and out smarting those who develop a system. In a perfect world, those ‘perps’ would use their intelligence to create the very systems they try to ruin. Thank you for the insight to the ‘51% attack’, Gail. Your blogs are always informative and instructional!

  22. Only greed is what comes to my mind when I read about a 51% attack.
    To come up with such an “evil” plan just to benefit oneself out of the hope many have put up in a program from Devs coding to members money transacting just to take control, even for a sec is to my eyes a malicious act of behavior.

    1. The comment below was posted during the time that the blogging points were down and no points were given. This is a test.
      Greed is what comes to my mind when I read about a 51% attack.
      To come up with such an “evil” plan just to benefit oneself out of the hope of many that have put up in a program from Dev´s coding to members money transacting just to take control, even for a sec is to my eyes a malicious act of behavior.

  23. This is very informative Gail, Thank you so much for the article, very well researched. Antonpolis said many times that bitcoin blockchain is more like rules without rulers and I find that interesting if adopted on governments governed by a similar system so that there will not be a breach of constitutional law

  24. Thank you Gail, for a most informative article. A 51% attack has been a concern and generated much discussion for sometime. Ethereum co-founder Vitalik Buterin tweeted after the latest attack on ETC: “ETC should just switch to proof of stake. Even given its risk-averse culture, at this point making the jump seems lower-risk than not making it.” Good to know Bitshares employs Delegated Proof-of-Stake Blockchain.

  25. after reading thru the great article by Gail and then reading replies — it is also sad in one aspect that people in the world seem to always have to try and get the advantage — if they just would do truth and be honorable in their business ventures –they really would see that its a good thing and — just imho it is the best way to run business — great read —

  26. It is reassuring that some are watching to catch, 51% of these thieves. They always seem to be jumping to scam, take, and hack. They readily take from legitimate and trustworthy. Little by little, I am coming to understand this foreign language of the digital currency and blockchain world. Considering there are a few who would try to deflect from the integrity of the blockchain, I feel it is still the safest avenue for bitcoin to flow.

  27. I am always learning something new with your posts Gail.
    51 % , I have not hear of that . I will however go look up . Andreas Antonopoulos video on the 51% attacks and learn some more on the subject. Thank you Gail for bringing this to our attention . Never to old to learn new things and when it comes to cryptos and Bitcoin. There really is a lot to learn. We all got to be safe in the crypto world that is all to fast approaching new paths of finance.

  28. Gail thanks for clarifying a complex subject for me. I have heard mentions of the 51% takeover on various podcast but never really understood the concept. After reading your blog I’m thinking were pretty safe considering the multitude of miners in the world. It sounds near impossible to have greater than a 51% stake in mining for one group…….hopefully.

  29. What a waste of time and talent. And for what gain? How do these brilliant minds get so overcome with greed that they will sacrifice their careers and families just for a bit of wealth? Seems they would realize they could make so much more by being honest and upright and I know they’d sleep better at night! Let’s hope it never becomes easy for them to do wrong!!

  30. I like this article because when thinking about companies and who controls the majority of them, you do not think about how you only need 51% to pretty much fully control the company. I had never heard of the term 51% attack but now that I have I will be doing much more research to learn more about this.

  31. The comment below was posted during the time that the blogging points were down and no points were given. This is a test.
    Greed is what comes to my mind when I read about a 51% attack.
    To come up with such an “evil” plan just to benefit oneself out of the hope of many that have put up in a program from Dev´s coding to members money transacting just to take control, even for a sec is to my eyes a malicious act of behavior.

  32. yeppers so much evil in this world just because of a simple term but so true a term — greed — so much devastation has been brought forward thru that term — however i have read this blog more than a few times and it still is a learning aspect for me — but being around peep to peep biz for over 40 years — nothing literally surprises me — shocks me yeppers but after a breath not surprising and it all leads back to that term — greed —

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