What Is a 51 Attack and How to Prevent Attacks in Bitcoin: Attacks Examples
Have you heard about the 51% attack?It is a situation when a miner or a specific group of miners is getting more than 50% of network blocks. Such an attack is one of the most important threats to people using and buying encrypted currencies. Successful blockchain attacks can have a profound impact on the encrypted money market and investments. So If investors are considering adding digital currencies to their portfolio, it is very important to understand the impact of such attacks.
What Is a 51 Attack?
All transactions made on the cryptocurrency network are recorded in registries, which are also known as blockchains. The 51% rule allows you to initiate attacks. Attackers can cancel the confirmation of new user transactions. Transactions that have already been completed can also be rolled back. This move helps them double their coin spending. Did bitcoin ever have a 51% attack? Yes, it did. Bitcoin is more likely to be attacked like this. Let us give you some examples.
Bitcoin Gold (2018)
More than $18 million was stolen from the attack at a double cost. The exchange tried to fend off the attack by waiting for longer confirmations before approving the transaction, but that did not help. The intruders were never found.
Bitcoin Cash (2019)
The attack was carried out to prevent unknown miners from obtaining coins. Which they should not be able to access. This is an example of when data mining can stop attacking. While such an attack has been instigated to protect the network, their influence and control are more likely to pose a threat.
However, we must admit that no attack, no matter how destructive it is, would be able to completely destroy Bitcoin.
How to Attack with Miners?
No one can control the blockchain with all transactions. When an attack occurs, the cryptocurrency network is disrupted. And scammers can:
- Prevent checks or confirmations of transactions;
- Exclude new transactions from the record;
- Prohibit anyone from mining coins on the network;
- Change the sequence of transactions;
- Double your coins with a reverse transaction.
This creates certain problems for investors. For example, a sharp drop in the price of cryptocurrency and a loss of confidence in the market.
How to Prevent Attacks in Bitcoin?
Satoshi Nakamoto describes the nature of transaction fees on the Bitcoin network as an incentive to stay honest. By always ensuring that no single miner or group of miners controls more than 50% of the computing power of the Bitcoin network, likely, a single miner or group looking to attack the network would not be able to outperform the longest and most proven blockchain. This requires a lot of equipment and energy. In addition, due to the random nature of the mining process, potential attackers need a certain amount of luck. An attack using bitcoin seems unlikely, simply due to the size and hashing speed of the network. The estimated cost of it on Bitcoin is just over $16 billion. However, many altcoins face much greater risks. All that is needed is a sufficient amount of rental mining equipment that does not need to be stored internally, and the initial investment is relatively large. It was because of these factors that Ethereum Classic was hacked and hackers stole a local cryptocurrency equivalent to over $1 million. The overall hash rate of the network does not match Bitcoin. More experienced investors are advised to invest in larger businesses because they are less susceptible to attacks.
Cryptocurrency investing has its pros and cons. But when you know about them, it is easier to prevent losing. Be careful and see you soon!
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