51% Attack in Crypto - What and how it can be prevented?
Security in crypto is very much paramount and it ensures the integrity of blockchains and decentralized networks. It is a threat where a single person or group of people gains control over more than half i.e 51% of a blockchain's network staking and mining power which are classified as the Proof of Work and Proof of Stake, Blockchain related.
Their 51% control of this allows these malicious authors to manipulate the system and undermine their security and integrity. Such harmful ways include problem of double spending which is as a result of reversed transactions, halting transactions from being confirmed and validated, and preventing both stakers and those who mine Blockchain networks from participating in these networks.
They have a significant influence over the operations done on the blockchain which threatens the reliability of the cryptocurrencies affect as a result of this attack.
How does this attack work? To know how it works, you need to understand how a blockchain operates. Transactions in a blockchain are embedded into blocks and added to a chain in chronological order. This endures that once these transactions are validated and added, it becomes permanent on the blockchain and can't be changed or altered.
The miners in proof of work use computational power to solve mathematical problems that see complex and when these problems are resolved, the miners get rewarded with cryptocurrencies and those stakers or validators in proof of stake hold and are willing to stake their crypto as collateral. The higher they stake, they higher their chances of getting selected.
So how is this connected to 51% attack? The mechanisms above ensure that there's no single entity in control of the blockchain, making it decentralised as it always is.
Some examples cryptocurrency that have experienced this kind of attack are the bitcoin gold verge etc which were considered networks that are less robust. Bitcoin hasn't experienced such due to its decentralization and extensive computational power. The mechanics of this type of attack include;
- Monopolizing mining rewards. The attacker can monopolize the mining process in proof of Work system, securing all blocks to themselves and reducing the incentives for participation in the mining activities. The attackers can also create versions of the blockchain which can cause confusion and instability within the blockchain network. By doing this, the attacker can rewrite the transaction history of that Blockchain and reduce the reliability in the system.
picture just used to illustrate.
- The attacker can also reverse transactions made already which brings about spending the same cryptocurrency more than once and also reduce its chances of getting verified which is against the principle of addition of transactions into blocks that are unchanged after verification.
Consequences of this 51% attack |
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We all know the consequences of malicious attacks in a crypto ecosystem. It can lead to serious physical problems but I'll start with the major which is Financial Losses.
Those who fall into the problem of double spending ends up loosing their funds or assets to these attackers which can sometimes lead to mental problems and the likes. Trust too is out of the ball and users may lose confidence in the integrity of the cryptocurrency affected which can lead to decline in the value of the asset and its credibility. The normal operations of a blockchain too would be disrupted.
How to prevent such attacks.... Decentralization and security of a network should be increased to detect attacks on the system and also distribute the control of the mining and staking activities evenly. 51% attack is a serious attack they shouldn't be taken lightly.
Understanding and mitigating this type of attack is good for maintaining the truth worthiness of the ecosystem. Binance and other exchanges has made everything in place to avoid such attack.
Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
where is your x promotion?
I've submitted it. The issue is that I'm always locked out from my twitter after making one post. I'll have to wait for hours before making another on twitter. I'll see how I can correct this
Note:- @bossj23, X Promotion link is missing.
Regards,
@theentertainer
Thanks for the review. I've submitted it. The issue is that I'm always locked out from my twitter after making one post. I'll have to wait for hours before making another on twitter. I'll see how I can correct this
https://twitter.com/bossj23Mod/status/1799537337321320572?t=FUDt5T-R5sqtW9P_GAfJNw&s=19
If we talk about 51% then it is too much because the majority is with the attackers, this is a very big issue, if it is not taken into consideration then it can change the entire system. This is a very informative post and today I got to know something good.