What is a 51% attack and how to detect it?

Despite being underpinned by blockchain technology that promises security, immutability, and implicit transparency, galore cryptocurrencies similar Bitcoin SV (BSV), Litecoin (LTC) and Ethereum Classic (ETC) person been taxable to 51% attacks respective times successful the past. While determination are galore mechanisms by which malicious entities tin and person exploited blockchains, a 51% attack, oregon a bulk onslaught arsenic it is besides called, occurs erstwhile a radical of miners oregon an entity controls much than 50% of the blockchain’s hashing powerfulness and past assumes power implicit it. 

Arguably the astir costly and tedious method to compromise a blockchain, 51% of attacks person been mostly palmy with smaller networks that necessitate little hashing powerfulness to flooded the bulk of nodes.

Understanding a 51% attack 

Before delving into the method progressive successful a 51% attack, it is important to recognize however blockchains grounds transactions, validate them and the antithetic controls embedded successful their architecture to forestall immoderate alteration. Employing cryptographic techniques to link consequent blocks, which themselves are records of transactions that person taken spot connected the network, a blockchain adopts 1 of 2 types of statement mechanisms to validate each transaction done its web of nodes and grounds them permanently.

While nodes successful a proof-of-work (PoW) blockchain request to lick analyzable mathematical puzzles successful bid to verify transactions and adhd them to the blockchain, a proof-of-stake (PoS) blockchain requires nodes to involvement a definite magnitude of the autochthonal token to gain validator status. Either way, a 51% onslaught tin beryllium orchestrated by controlling the network’s mining hash complaint oregon by commanding much than 50% of the staked tokens successful the blockchain.

To recognize however a 51% onslaught works, ideate if much than 50% of each the nodes that execute these validating functions conspire unneurotic to present a antithetic mentation of the blockchain oregon execute a denial-of-service (DOS) attack. The second is simply a benignant of 51% onslaught successful which the remaining nodes are prevented from performing their functions portion the attacking nodes spell astir adding caller transactions to the blockchain oregon erasing aged ones. In either case, the attackers could perchance reverse transactions and adjacent double-spend the autochthonal crypto token, which is akin to creating counterfeit currency.

Needless to say, specified a 51% onslaught tin compromise the full web and indirectly origin large losses for investors who clasp the autochthonal token. Even though creating an altered mentation of the archetypal blockchain requires a phenomenally ample magnitude of computing powerfulness oregon staked cryptocurrency successful the lawsuit of ample blockchains similar Bitcoin oregon Ethereum, it isn’t arsenic far-fetched for smaller blockchains. 

Even a DOS onslaught is susceptible of paralyzing the blockchain’s functioning and tin negatively interaction the underlying cryptocurrency’s price. However, it is improbable that older transactions beyond a definite cut-off tin beryllium reversed and frankincense puts lone the astir caller oregon aboriginal transactions made connected the web astatine risk.

Is a 51% onslaught connected Bitcoin possible?

For a PoW blockchain, the probability of a 51% onslaught decreases arsenic the hashing powerfulness oregon the computational powerfulness utilized per 2nd for mining increases. In the lawsuit of the Bitcoin (BTC) network, perpetrators would request to power much than fractional of the Bitcoin hash rate that presently stands astatine ~290 exahashes/s hashing power, requiring them to summation entree to astatine slightest a 1.3 cardinal of the astir almighty application-specific integrated circuit (ASIC) miners similar Bitmain’s Antminer S19 Pro that retails for astir $3,700 each. 

This would entail that attackers request to acquisition mining instrumentality totaling astir $10 cardinal conscionable to basal a accidental to execute a 51% onslaught connected the Bitcoin network. Then determination are different aspects similar energy costs and the information that they would not beryllium entitled to immoderate of the mining rewards applicable for honorable nodes. 

However, for smaller blockchains similar Bitcoin SV, the script is rather different, arsenic the network’s hash complaint stands astatine astir 590PH/s, making the Bitcoin web astir 500 times much almighty than Bitcoin SV.

 In the lawsuit of a PoS blockchain similar Ethereum, though, malicious entities would request to person much than fractional of the full Ether (ETH) tokens that are locked up successful staking contracts connected the network. This would necessitate billions of dollars lone successful presumption of purchasing the requisite computing powerfulness to adjacent person immoderate semblance of launching a palmy 51% attack. 

Moreover, successful the script that the onslaught fails, each of the staked tokens could beryllium confiscated oregon locked, dealing a hefty fiscal stroke to the entities progressive successful the purported attack.

How to observe and forestall a 51% onslaught connected a blockchain?

The archetypal cheque for immoderate blockchain would beryllium to guarantee that nary azygous entity, radical of miners oregon adjacent a mining excavation controls much than 50% of the network’s mining hashrate oregon the full fig of staked tokens. 

This requires blockchains to support a changeless cheque connected the entities progressive successful the mining oregon staking process and instrumentality remedial enactment successful lawsuit of a breach. Unfortunately, the Bitcoin Gold (BTG) blockchain couldn’t expect oregon forestall this from happening successful May 2018, with a akin onslaught repeating successful January 2020 that pb to astir $70,000 worthy of BTG being double-spent by an chartless actor. 

In each these instances, the 51% onslaught was made imaginable by a azygous web attacker gaining power implicit much than 50% of the hashing powerfulness and past proceeding to behaviour heavy reorganizations of the archetypal blockchain that reversed completed transactions.

The repeated attacks connected Bitcoin Gold bash constituent retired the value of relying connected ASIC miners alternatively of cheaper GPU-based mining. Since Bitcoin Gold uses the Zhash algorithm that makes mining imaginable adjacent connected user graphics cards, attackers tin spend to motorboat a 51% onslaught connected its web without needing to put heavy successful the much costly ASIC miners. 

This 51% onslaught illustration does item the superior information controls offered by ASIC miners arsenic they request a higher quantum of concern to procure them and are built specifically for a peculiar blockchain, making them useless for mining oregon attacking different blockchains.

However, successful the lawsuit that miners of cryptocurrencies similar BTC displacement to smaller altcoins, adjacent a tiny fig of them could perchance power much than 50% of the altcoin’s smaller web hashrate. 

Moreover, with work providers specified arsenic NiceHash allowing radical to rent hashing powerfulness for speculative crypto mining, the costs of launching a 51% onslaught tin beryllium drastically reduced. This has drawn attraction to the request for real-time monitoring of concatenation reorganizations connected blockchains to item an ongoing 51% attack. 

MIT Media Lab’s Digital Currency Initiative (DCI) is 1 specified inaugural that has built a strategy to actively show a fig of PoW blockchains and their cryptocurrencies, reporting immoderate suspicious transactions that whitethorn person double-spent the autochthonal token during a 51% attack.

Cryptocurrencies specified arsenic Hanacoin (HANA), Vertcoin (VTC), Verge (XVG), Expanse (EXP), and Litecoin are conscionable a fewer examples of blockchain platforms that faced a 51% onslaught arsenic reported by the DCI initiative. 

Of them, the Litecoin onslaught successful July 2019 is simply a classical illustration of a 51% onslaught connected a proof-of-stake blockchain, adjacent though the attackers did not excavation immoderate caller blocks and double-spent LTC tokens that were worthy little than $5,000 astatine the clip of the attack. 

This does item the little risks of 51% attacks connected PoS blockchains, deeming them little charismatic to web attackers, and is 1 of the galore reasons for an expanding fig of networks switching implicit to the PoS statement mechanism.