A potential attack on a blockchain network where a single entity gains control of the majority of the network's hash rate.
A Majority Attack, also known as a 51% attack, occurs when a single entity gains control of over 51% of a blockchain network's hash power. This control allows the entity to manipulate the network by orphaning confirmed blocks and selecting which transactions get confirmed or left in the mempool.
This control can be used to selectively confirm transactions, potentially leading to no transactions being confirmed, specific transactions being manipulated, or executing double spends. The primary motivation is often financial gain through double-spending: spending the same coins multiple times by reversing previously confirmed transactions.
"In a 51% attack, an attacker with majority control could potentially reverse transactions that they send while they are in control, leading to a double-spending problem."
"An attacker with 51% of the network hash power could send cryptocurrency to an exchange, convert it to another currency or fiat, withdraw this value, and then rewrite the blockchain to remove their original deposit transaction."
The risk of a Majority Attack is low on networks with significant hash power due to the high cost and coordination required. However, blockchains with low hash power are more vulnerable. Major cryptocurrencies with substantial mining infrastructure like Bitcoin and Bitcoin Cash have significant protection due to their large mining communities.
The risk of a 51% attack decreases as the hash power and the number of stakeholders for a blockchain increase, making the network more secure. The economics of attempting such an attack often make it financially impractical on large networks.
"Shortly after the BCH / BCHA hard fork, the BCHA network was subjected to a 51% attack over multiple days. During this time, confirmation times reached up to 12 hours. The attack was mitigated when the BCHA node released an update to their mining client."
"For established networks like Bitcoin Cash, the cost of acquiring sufficient mining hardware to conduct a 51% attack would be prohibitively expensive, requiring hundreds of millions of dollars in equipment, plus enormous electricity costs, making the attack economically irrational in most scenarios."
Various strategies can be employed to prevent a Majority Attack. These include increasing the network's hash power, implementing a different consensus mechanism, or using checkpointing to limit the depth of a blockchain reorganization. Some networks also implement delayed confirmations for high-value transactions.
"Some cryptocurrencies use a consensus mechanism called Proof of Stake (PoS) instead of Proof of Work (PoW) to reduce the risk of a 51% attack."
"Many cryptocurrency exchanges protect themselves against potential 51% attacks by requiring more confirmations for deposits of currencies with lower hash rates. For instance, they might require 6 confirmations for Bitcoin or Bitcoin Cash, but 50+ confirmations for smaller chains."
Throughout cryptocurrency history, several successful 51% attacks have occurred, primarily targeting smaller networks with relatively low hash rates. These incidents have led to financial losses and decreased confidence in the affected cryptocurrencies.
"In 2018, Bitcoin Gold (BTG) suffered multiple 51% attacks that resulted in the theft of approximately $18 million worth of BTG from exchanges through double-spending attacks."
"In January 2020, Ethereum Classic (ETC) experienced a 51% attack involving a blockchain reorganization of over 4,000 blocks, which led to double-spending of approximately 807,260 ETC (worth around $5.6 million at the time)."
The resistance to 51% attacks is often viewed as a key indicator of a blockchain's security and health. Networks with more distributed mining or staking power are considered more secure against such attacks, highlighting the importance of decentralization in blockchain security.
"Bitcoin Cash maintains security against 51% attacks through its substantial mining community and hash rate, alongside careful protocol development that considers attack resistance in network upgrades."
"Some cryptocurrency projects actively monitor hash rate distribution across mining pools to ensure no single entity approaches control of 51% of the network, promoting a healthier and more attack-resistant ecosystem."
All terms and definitions may update as the Cryptionary improves.