A 51% attack, also known as a majority attack, is a potential attack vector that can be exploited if a single miner or mining pool gains control of the majority of the hash rate on a proof-of-work blockchain network like Bitcoin or Ethereum. The ability to control the majority of the hash rate enables the attacker to manipulate transactions, double spend coins, and undermine the trust in the blockchain network.
How does a 51% attack work?
On proof-of-work blockchains, transactions are confirmed and secured through a decentralized network of miners who compete to solve cryptographic puzzles and create new blocks. The probability of a miner solving the puzzle and creating the next block is proportional to the amount of hash rate (computing power) they control relative to the total network hash rate.
If a miner or mining pool gains control of 51% or more of the total network hash rate, they have majority control over the creation of new blocks and the confirming of transactions. This enables them to exploit and manipulate the blockchain in their favor by:
- Preventing new transactions from gaining confirmations by refusing to add any blocks that contain transactions they don’t approve of.
- Reversing transactions that were previously confirmed by “re-writing” the blockchain history through a 51% attack.
- Double spending coins by first making a payment, then starting a fork from one block behind the payment block and sending those same coins to themselves in a new block on the forked chain.
By controlling the majority of the hash rate, the attacking miner has an improved chance of their forked chain overtaking the legit chain and being accepted by network nodes as the valid chain. This enables them to overwrite transaction history and double spend coins essentially at will.
What is needed for a 51% attack?
To successfully execute a 51% attack, an attacker needs a few key elements:
- Majority hash rate control – The attacker needs to gain control of at least 51% of the total network hash rate. This provides the ability to reliably produce longer forked chains faster than the rest of the legitimate network miners.
- Sustained control – 51% control needs to be maintained long enough to execute the manipulation, which requires hours at a minimum to potentially weeks of sustained majority control.
- An economic incentive – 51% attacks are rarely executed for the sake of causing random disruption. Attackers are financially motivated, so require some coin, token, or economic benefit as an incentive.
Have successful 51% attacks occurred?
There have been several successful majority attacks that exploited vulnerabilities of smaller proof-of-work blockchain networks. Some examples include:
- Ethereum Classic (ETC) – Suffered multiple 51% attacks between 2019-2020. An attacker reorganized over 7,000 blocks in one attack, double spending millions in ETC coins.
- Bitcoin Gold (BTG) – Lost over $72 million in two 51% attacks in 2018, one which double spent $17.5 million in BTG.
- Verge (XVG) – Attackers gained majority control through a 51% attack for several hours in 2018, mining an enormously inflated number of coins valued at $1.7 million at the time.
The largest proof-of-work blockchains like Bitcoin and Ethereum have never suffered a successful majority attack. But the risk still exists if a single miner or mining pool gains too much control of the hash rate. This occurred in mid-2014 when mining pool GHash.io reached over 50% of the Bitcoin network hash rate, requiring them to voluntarily reduce their hashing power to reduce the risk.
Could a 51% attack impact Bitcoin or Ethereum?
A 51% attack on a massive network like Bitcoin or Ethereum is currently highly unlikely, but not impossible. Here are some of the challenges:
- Acquiring the enormous amount of computing power needed to reach 51% of the Bitcoin or Ethereum hash rate would be immensely expensive. Bitcoin’s total hash rate is over 200 exahash/second (over 1 million powerful ASIC miners).
- As two of the largest proof-of-work networks, Bitcoin and Ethereum are more secure through their decentralization and global distribution of miners and hash rate. This makes accumulating majority control difficult.
- Maintaining 51% control long enough to execute attacks before being detected would be challenging.
- Executing an attack would undermine trust and destroy billions in value. The potential costs likely outweigh the gains for most miners and pools.
However, the risks should still not be ignored. Bitcoin and Ethereum miners should aim to keep hashing power appropriately decentralized and make sure no single entity gains too much control over the networks.
How can 51% attacks be prevented?
Here are some ways proof-of-work blockchains can reduce the risk of 51% attacks:
- Promote decentralized mining to prevent single entities from gaining too much control over the hash rate.
- Implement more frequent difficulty adjustments to make it harder for attackers to rapidly gain majority control through hash rate.
- Adopt alternative consensus models like proof-of-stake that remove mining and hash rate vulnerabilities.
- Improve ability to detect attacks early through blockchain monitoring for suspicious activity.
- Enable fork choice rules that reject dishonest chains if malicious activity is detected.
While completely eliminating the risk is likely impossible, steps can be taken to significantly reduce the threat and make successful attacks difficult, expensive, and not economically viable for attackers.
Conclusion
A 51% attack is a serious vulnerability of proof-of-work blockchains that could undermine trust in a cryptocurrency if exploited. However, majority attacks also require immense resources, coordination, and sustained control to successfully execute. For smaller networks, it represents a real threat as seen in past attacks. But for larger networks like Bitcoin and Ethereum, the risk still exists but diminishes through greater decentralization and distribution of mining power. By promoting decentralization and implementing preventative measures, the possibility of 51% attacks can be reduced to protect the security and integrity of blockchain networks against this threat.