51% Attack

In decentralized blockchain networks, security relies on distributed consensus. Most networks use Proof-of-Work (PoW) or Proof-of-Stake (PoS) mechanisms to validate transactions and add new blocks. However, if a malicious actor gains control of 51% or more of the network’s computing or staking power, they can:

• Double-spend coins – Reversing confirmed transactions to spend the same assets multiple times.
• Censor transactions – Preventing certain transactions from being confirmed.
• Reorganize blocks – Altering the blockchain history by removing or changing transactions.
• Disrupt network stability – Damaging trust in the network, leading to price drops and loss of user confidence.

While a 51% attack enables control over transaction validation, it does not allow attackers to create new coins or alter protocol rules without consensus.

🏛 Example 1: Ethereum Classic (ETC) Attacks

Ethereum Classic (ETC) has suffered multiple 51% attacks. In August 2020, attackers successfully double-spent over $5.6 million worth of ETC by reorganizing over 7,000 blocks. This was possible due to ETC’s relatively low hashrate compared to larger PoW networks like Bitcoin.

🏛 Example 2: Bitcoin Gold (BTG) Attack

Bitcoin Gold (BTG), a Bitcoin fork, was hit by a 51% attack in May 2018, resulting in losses of $18 million from double-spending attacks. The attackers rented mining power via NiceHash, highlighting the vulnerability of PoW networks with lower hash rates.

📚 References

1. Ethereum Classic Blog – Analysis of 51% Attack on ETC
2. Investopedia – What is a 51% Attack?

⚠️ Controversies & Misconceptions

• “Bitcoin is vulnerable to 51% attacks” – While theoretically possible, Bitcoin's massive hashrate makes it extremely costly and impractical to execute a 51% attack.
• “51% control means full control” – Attackers cannot change the network’s protocol, create coins, or access users' private keys.

🚀 Conclusion

A 51% attack poses a significant risk to smaller blockchain networks but is rare in large, well-secured chains like Bitcoin and Ethereum due to their high mining power and security measures.

Related Terms

• Proof-of-Work (PoW)

  A consensus mechanism in blockchain networks where participants, known as miners, expend computational power to solve complex mathematical puzzles. The first miner to solve the puzzle gets the right to add a new block to the blockchain and is rewarded, typically with cryptocurrency.

• Proof-of-Stake (PoS)

  A consensus mechanism in blockchain networks where validators are selected to propose and validate new blocks based on the amount of cryptocurrency they hold and are willing to "stake" as collateral.

• ERC-20

  ERC-20 is a widely used token standard on the Ethereum blockchain for fungible tokens. It defines a set of rules that enable seamless interaction between tokens and Ethereum-based applications.