What Is a 51% Attack?
A 51% attack on a blockchain happens when a user or group with malicious intent acquires control over the blockchain’s mining power or hashrate. In doing so, they can create invalid transactions or deny legitimate ones on the blockchain’s ledger. The impacts of this can be mild or severe, depending on the mining power acquired by the attacker(s).
51% attacks are less likely to occur for larger cryptocurrencies because of the cost of acquiring sufficient amounts of mining power. Crypto51 estimates that in order to perform a 51% attack on Bitcoin, it would incur approximately US$933,000 per hour. Most successful 51% attacks occur in smaller cryptocurrencies, which require lesser mining power.
How Does a 51% Attack Work?
In 51% attacks, over 50% control of a blockchain is obtained. To be precise, for networks with a Proof of Work (PoW) consensus mechanism, the attacker(s) must control at least 51% of its mining power. For blockchains operating on a Proof of Stake (PoS) mechanism, the attacker(s) must amass at least 51% of the native cryptocurrency.
Once more than 50% control of a network is achieved, the attacker(s) can reject legitimate transactions, verify illegitimate transactions, or reorganise blocks on the blockchain. As a result, they are able to double-spend the underlying cryptocurrency, redirect transactions, and — ultimately — manipulate the network for financial gain.
