Satoshi Nakamoto is a genius. This individual has created a near flawless ecosystem by the name of Blockchain Technology. He has also played a key role in creating the king of cryptocurrencies aka. Bitcoin. While these things can be hailed as a reason enough for him to warrant a Time magazine man of the year award, there is this one loophole that he left out. This one flaw in a near perfect technology with which one can easily collapse the entire ecosystem. This flaw, this little imperfection is known as the 51% attack!
What was once even absurd to imagine, has suddenly become a reality which is being faced by a lot of cryptocurrencies. In fact, at the time of going to press, there were 5 different currencies that had been affected by the same vulnerability.
This 51% attack has now become possible simply because of the the large mining pools that are used for hashing (Computing) purposes. Apart from them, there are now mining ‘farms’ in China and Iceland. Due to the immense amount of hashing(Computing) power that is granted to these farms and pools, it becomes easy for the hackers to execute the 51% attack.
What exactly is the 51% attack?
When more than half of the mining power of any cryptocurrencies network comes under control of an individual or a group, these hackers get the power to modify or change the virtual ledger and alter or transfer funds. The proof-of-work consensus protocol is hence compromised and it is this unethical procedure that is called the 51% attack. This attack is carried out in small sized ecosystems. Hence, fledgling cryptocurrencies such as, Bitcoin Gold, ZenCash, Verge, Monacoin and Litecoin Cash are few who have recently faced this attack.
Many naysayers may preach that this trend shall not continue for much longer, as it is time and energy (electricity) consuming and the returns are not as fruitful. But, the sad reality is that this trend is here to stay. As time moves ahead, the hackers are going to utilize the data mining pools and make themselves a killing. The only one who shall suffer because of them shall be the investor of the said cryptocurrency.
What it takes to launch a 51% attack?
While we may deny the reality, and say that these unethical practices shall not prevail, the truth of the matter is that it doesn’t take much. In fact, there is a complete table on how much it shall cost to launch this attack against renowned cryptocurrencies courtesy of Crypto51.App
There you have it. The bigger the ecosystem like Bitcoin the lesser chances of there being an attack. Inversely, the smaller the ecosystem like Cat Coin or Smart Coin, it shall take the hackers less than a dollar to mount the attack. The only consolation one can give is that one hour is not enough to successfully undertake such an attack.
Guess in upcoming times, we need to be better prepared. Experts claim that there are multiple fixes that are available for this problem. They are including an upgrading to proof-of-stake on the ecosystem or compromising and sharing the security protocols with a larger Blockchain that uses Proof of Work algorithm.
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