What does the term 51% Attack mean?
The 51% attack refers to the attack on a blockchain – usually the Bitcoins or other cryptocurrencies for which such an attack is still hypothetically feasible – by a group of miners who make up more than 50% of the mining hashrates or the computing power of the network.
In theory, attackers could prevent new transactions from getting acknowledgments, which could stop payments to some or all users. They would also be able to cancel transactions that were completed while controlling the network, which would mean they could spend coins twice.
However, they would almost certainly not be able to create new coins or alter old blocks, so a 51% attack would probably not destroy Bitcoin or any other Blockchain-based currency, even if it proved very damaging.
Bitcoin and other cryptocurrencies are based on blockchains, which are also known as distributed ledgers. These digital files record every transaction made on the network of a cryptocurrency and are available to all users for review.
This means that no one can spend a coin twice; the digital equivalent of a perfect counterfeit would quickly destroy confidence in the value of the coin.
As the name suggests, a blockchain is a chain of blocks of data that records all completed transactions over a period of time (Bitcoin generates a new block approximately every ten minutes).
Once a block is finalized or “mined”, it cannot be changed because a fraudulent version of the public ledger would be quickly detected and rejected by the users of the network.
By controlling most of the computing power in the network, an attacker or a group of attackers can disrupt the process of capturing new blocks.
They could prevent other miners from completing blocks, which in theory could monopolize the mining of new blocks.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.