the introduction

Before talking about 51% attacks, it is necessary to learn well about mining and systems based on Blockchain technology.

One of the most important strengths of Bitcoin and the blockchain technology on which it is based is that data is generated and verified in a distributed manner. Decentralized nodes work to ensure that the rules of the protocol are adhered to and that all network participants agree on the state of the blockchain network at a specific time. This requires the majority of nodes to constantly agree on mining processing, software version used, transaction validation, etc.

The Bitcoin network's consensus algorithm (the proof-of-work model) ensures that miners will only be able to authenticate a new block of transactions after the network nodes agree that the hash of the block submitted by the miner is accurate (i.e., the hash of the block proves that the miner did what was necessary to achieve Correct solution to that node's problem.) 

The blockchain infrastructure, as a decentralized ledger and distributed system, prevents any central entity from leveraging the network for its own purposes, so the Bitcoin network has no sole control over it.

Since the mining process (in proof-of-work systems) requires the investment of huge resources in terms of electricity and computing, a miner's performance depends on the extent of his or her computational power, commonly referred to as hash power or hash rate. There are many mining nodes in different locations competing to take their turn in finding the correct block hash and receiving the reward of new Bitcoins.

In this context, the hashing power is distributed among different nodes around the world, meaning that the hashing rate is not controlled by a single entity. Or at least it is assumed so.

But what happens when the hash rate is not well distributed? What happens if a single entity or entity is able to own more than 50% of the retail capacity? One possible outcome is what is called a 51% attack, also known as a majority attack.

What are 51% attacks?

The 51% attack is a potential attack on a blockchain network, in which a single entity or party is able to control the largest share of the hash rate, which may cause the network to crash. In this scenario, the attacker may have mining capabilities that allow him to block or modify the order of transactions. It may also be able to reverse transactions it executed while it was in control of the network, which could lead to a double-spending problem.

A successful majority attack may also allow the attacker to prevent the confirmation of some or all transactions (transaction denial of service) or prevent some or all miners from mining, resulting in what is known as a mining monopoly.

On the other hand, a majority attack may not allow the attacker to reverse transactions from other users or prevent transactions from being created and broadcast on the network. Situations such as changing the block reward, creating coins unexpectedly, or stealing coins that the attacker did not previously have are unlikely to happen.

How likely is a 51% attack? 

Since the security of a blockchain network is based on a distributed network of nodes, all participants are involved in the process of reaching consensus. This is one of the reasons why these networks have high levels of security. The larger the network, the stronger it is to withstand attacks and data corruption.

As for blockchain networks that rely on the proof-of-work model, the higher the miner’s hash rate, the greater his chance of finding a correct solution for the next block. This is because the mining process involves unlimited hash attempts. When computing power increases, the number of attempts per second increases. Many miners joined the Bitcoin network at the beginning of its emergence to contribute to its growth and security. As the price of Bitcoin as a currency has risen, a large number of miners have joined the system in order to compete for block rewards (currently 12.5 Bitcoins per block). This competition-based scenario is one of the reasons for the security of the Bitcoin network. Miners would have no incentive to invest a huge amount of resources if the main motivation was not to be honest and seek a block reward.

From this perspective, the probability of an attack occurring at 51% is unlikely given the attractiveness of the network. After a blockchain network reaches a significant level of growth, the probability that a single person or group of people will have the computing power to outperform all other participants quickly drops to very low levels.

In addition, it becomes more difficult to change previously confirmed blocks as the chain grows, since all blocks are linked to each other via cryptographic proofs. For the same reason, the more confirmations there are on a block, the higher the costs of modifying or reversing transactions on it. Therefore, a successful attack will only allow transactions to be modified for a few recent blocks, and for a short period.

To illustrate the matter, imagine a scenario where a malicious actor does not seek to make a profit, but rather decides to attack the Bitcoin network in order to destroy it, no matter what it takes. Even if the attacker succeeds in infiltrating the network, the Bitcoin network's programming and protocol will quickly be modified and configured to respond to this attack. This requires the rest of the nodes on the network to agree and agree to these changes, and this can happen very quickly during emergency situations. The Bitcoin network has a tremendous ability to confront attacks and is considered the best digital currency network ever in terms of security and reliability. 

Although it may be difficult for an attacker to have more computing power than other participants in the Bitcoin network, the issue is not that difficult with smaller cryptocurrencies. When comparing Bitcoin to alternative digital currencies, we find that alternative currencies have a relatively low level of hashing to secure their blockchain network. This is low enough that there is a 51% chance of an attack occurring. The most prominent examples of cryptocurrency networks that have been subjected to majority attacks are Monacoin, Bitcoin Gold, and ZenCash.