51% Attack: Definition, Who Is At Risk, Example, and Cost [ Complete Guide 2024]

What Is a 51% Attack?

A 51% attack is an attack on a cryptocurrency blockchain by an entity or group that controls more than 50% of the network. If a party were to gain this much control of a network, it would have the power to alter the blockchain.

The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse non-confirmed transactions that were completed while they were in control. Reversing transactions could allow them to double-spend coins, one of the issues mechanisms like proof-of-work were created to prevent.

KEY TAKEAWAYS

• Blockchains are distributed ledgers that record every transaction made on a cryptocurrency’s network.
• A 51% attack is an attack on a blockchain by an entity or group that controls more than 50% of the network.
• Attackers with majority network control can interrupt the recording of new blocks by preventing other miners from completing blocks.
• Changing historical blocks is impossible due to the chain of information stored in Bitcoin’s blockchain.
• Although a successful attack on Bitcoin or Ethereum is unlikely, smaller networks are frequent targets for 51% attacks.

Understanding a 51% Attack

A blockchain is a distributed ledger—essentially a database—that records transactions and information about them. The blockchain’s network reaches a majority consensus about transactions through a validation process. The blocks where the data is stored are sealed. The blocks are linked together via cryptographic techniques where previous block information is recorded in each block. This makes the blocks nearly impossible to alter once they are confirmed enough times.

The 51% attack is an attack on the blockchain, where a group controls more than 50% of the hashing power—the computing that solves the cryptographic puzzle—of the network. This group then introduces an altered blockchain to the network at a very specific point in the blockchain, which is theoretically accepted by the network because the attackers would own most of it.1

Changing historical blocks—transactions locked in before the start of the attack—would be extremely difficult even in the event of a 51% attack. The further back the transactions are, the more difficult it is to change them. It would be impossible to change transactions before a checkpoint, where transactions become permanent in Bitcoin’s blockchain.

Attacks Are Prohibitively Expensive

A 51% attack is a very difficult and challenging task on a blockchain network with a large participation rate. In most cases, the group of attackers would need to be able to control the necessary 51% and have created an alternate blockchain that can be inserted at exactly the right moment. Then, they would need to out-hash the main network. The cost of doing this is one of the most significant factors that prevent a 51% attack.

For example, one of the most advanced application-specific integrated circuit (ASIC) miners is the WhatsMiner M63S. It costs more than $10,000 (new) and has a hash rate of 406 terahashes per second (TH/s).2 A single or smaller group of miners would not be able to alter and mine the Bitcoin blockchain with only a few of these machines. It would take thousands of these ASICs to get ahead of the Bitcoin network. Smaller networks could be out-hashed using these mining rigs, but the benefits of doing so wouldn’t outweigh the costs of funding the attack and setting it up.

FAST FACT: Hashing power rental services provide attackers with lower costs, as they only need to rent as much hashing power as they need for the duration of the attack.3

After Ethereum transitioned to proof-of-stake, a 51% attack on the Ethereum blockchain became even more expensive. To conduct this attack, a user or group would need to own 51% of the staked ETH on the network. It is possible for someone to own that much ETH, but it’s unlikely.

According to Beaconchain, more than 32.3 million ETH were staked on May 8, 2024.4 An entity would need to own and stake more than 16.5 million ETH (more than $49 billion as of May 8, 2024) to attempt an attack.5

Once the attack started, the consensus mechanism would likely recognize it and immediately slash the staked ETH, costing the attacker an extraordinary amount of money. Additionally, the community can vote to restore the “honest” chain, so an attacker would lose all of their ETH just to see the damage repaired.6

Attack Timing

In addition to the costs, a group attempting to attack the network using a 51% attack must not only control 51% of the network but also introduce the altered blockchain at a very precise time. Even if they own 51% of the network hashing rate, they still might not be able to keep up with the block creation rate or get their chain inserted before valid new blocks are created by the ‘honest’ blockchain network.

Again, this is possible on smaller cryptocurrency networks because there is less participation and lower hash rates. Large networks make it nearly impossible to introduce an altered blockchain.

There isn’t a specific time for a 51% attack to happen. It depends on a few factors:

• Opportunity: An attacker needs to find a window of opportunity to gain control of more than 50% of the hashing power. This could be through renting hash power, compromising mining pools, or even building their own massive mining infrastructure.
• Cost vs. Benefit: Launching a 51% attack is expensive. The attacker needs to weigh the potential gains from the attack (e.g., stolen coins) against the cost of acquiring and maintaining hashing power.
• Network Difficulty: Some blockchains are harder to attack than others due to their hashing difficulty. This difficulty is a measure of how computationally intensive it is to mine a block. The higher the difficulty, the more expensive it is to gain a majority.

Here’s a breakdown of how these factors affect attack timing:

• Sudden Opportunity: If a vulnerability is discovered in a mining pool or a large amount of hash power becomes available for rent, an attacker might seize this chance to launch an attack.
• Gradual Takeover: An attacker could slowly accumulate hashing power over time, eventually reaching a majority and launching a sustained attack.
• Economic Fluctuations: If the price of the cryptocurrency being attacked goes up significantly, it could become more profitable for an attacker to launch an attack, even if it’s expensive.

FAST FACT: Despite the name, it is not necessary to have 51% of a network’s mining power to launch an attack. However, such an attack would have a much lower chance of success.

Outcome of a Successful Attack

In the event of a successful attack, the attackers could block other users’ transactions or reverse them and spend the same cryptocurrency again. This vulnerability, known as double-spending, is the digital equivalent of a perfect counterfeit. It is also the basic cryptographic hurdle blockchain consensus mechanisms were designed to overcome.

Successful 51% attackers may also implement a Denial-of-Service (DoS) attack, where they block the addresses of other miners for the period they control the network.1 This keeps the “honest” miners from reacquiring control of the network before the dishonest chain becomes permanent.

A successful 51% attack on a blockchain can have several negative outcomes, depending on the attacker’s goals. Here’s a breakdown of some potential consequences:

• Double Spending: This is a classic attack where the attacker spends the same coins twice. With control over the mining process, they can manipulate transactions and create a new version of the blockchain where their fraudulent spending is confirmed.
• Transaction Reversal: The attacker can reverse completed transactions, essentially stealing the cryptocurrency from the recipient. This undermines trust in the entire network.
• Network Disruption: The attack can slow down or even halt the entire blockchain network. This can prevent legitimate transactions from being processed and create chaos for users.
• Loss of Confidence: A successful attack can damage the reputation of the blockchain and the cryptocurrency it supports. This can lead to a decrease in user confidence and investment.
• Selective Censorship: In some cases, attackers might use their control to prevent specific transactions from being confirmed. This could be used to silence dissent or manipulate the network for personal gain.

It’s important to note that some blockchains are more vulnerable to 51% attacks than others. Blockchains with a smaller hashrate (total computing power) are easier targets.

Here are some additional points to consider:

• Blockchain Recovery: Most blockchains have mechanisms in place to try and recover from a 51% attack. This might involve forking the blockchain (creating a new version that excludes the attacker’s actions) or implementing harsher penalties for malicious miners.
• Security Improvements: Successful attacks often lead to increased security measures being implemented on the blockchain. This can make it more expensive and difficult to launch future attacks.

Who Is at Risk of 51% Attack?

The type of mining equipment is also a factor, as ASIC-secured mining networks are less vulnerable than those that can be mined with GPUs; they are much faster. Cloud services such as NiceHash—which considers itself a “hash-power broker”—theoretically make it possible to launch a 51% attack using only rented hash power, especially against smaller, GPU-only networks.7

Bitcoin Gold has been a common target for attackers because it is a smaller cryptocurrency by hashrate. Since June 2019, the Michigan Institute for Technology’s Digital Currency Initiative has detected, observed, or been notified of more than 40 51% attacks—also called chain reorganizations, or reorgs—on Bitcoin Gold, Litecoin, and other smaller cryptocurrencies.3

Are the Odds of a Bitcoin 51% Attack Growing?

On May 8, 2024, the Bitcoin network’s total hashrate was 569.29 exahashes per second (EH/s). The top three mining pools by three-day hashrate were:8

• FoundryUSA, at 175.76 EH/s; 30.9% of the total Bitcoin network hashrate
• AntPool, at 161.77 EH/s; 28.4% of the total Bitcoin network hashrate
• ViaBTC, at 73.11 EH/s; 12.8% of the total network hashrate

Combined, these three pools made up 72.1% of the network hashrate, a whopping 486.9 EH/s (486.9 million TH/s—the CPU in your computer might be able to hash at about 15 kilo hashes per second). If Foundry and ViaBTC were to collude, they could take over 51% of the hashrate (248 EH/s).

Foundry and Antpool combined could control 69.3% of the network. Because these pools use platforms to connect pool members and manage workloads, if the managers decided to take control they could issue work orders to their pools to work on the altered chain. The pool’s miners would have no idea which chain they were working on since their mining rigs automatically work on whatever task they are given.

Even more concerning is that these three pools also monopolize the majority of the network hash rates for Bitcoin Cash, Litecoin, and Bitcoin SV.

These pools have been operating for several years without issue, but the fact remains that they already control most hashing power of the minable and profitable cryptocurrencies.8

What Does a 51% Attack Do?

A 51% attack alters blocks that are being added to the blockchain, giving the attackers the ability to create or alter transactions for the period they are in control.

In the world of cryptocurrencies, a 51% attack is a serious threat. It happens when a single entity (think a person or group) gains control of more than half of the computing power on a blockchain network.

Imagine a bunch of computers working together to validate transactions on a cryptocurrency like Bitcoin. With a 51% attack, the attacker basically has more than half the votes on the network. This gives them some nasty abilities:

• Block Transactions: They can stop new transactions from being confirmed, essentially halting payments on the network.
• Rewind the Blockchain: For a short period, they can rewrite parts of the transaction history. This allows them to potentially:
  • Double Spend Coins: They could spend the same coins twice, essentially stealing money.
  • Reverse Transactions: They might be able to reverse their own transactions, taking back money they spent.

Has a 51% Attack Ever Happened?

Yes. Several blockchains have been attacked using this method, but they had small networks, were new, or had other vulnerabilities that made it possible.

Here’s a breakdown:

• More Likely on Smaller Blockchains: Cryptocurrencies with lower hash rates (computing power) are more vulnerable to 51% attacks because it’s cheaper for attackers to gain control of a majority of the network’s power.
• Examples: There have been several documented cases of 51% attacks on smaller cryptocurrencies. For instance, Verge (XVG) and Ethereum Classic (ETC) have both been targeted in the past.
• Limited Impact: Since these are smaller currencies, the impact of the attacks was also relatively limited. The stolen amounts were likely less significant, and the attacks themselves brought negative attention to the currencies, affecting their value.
• Not a Major Threat for Bitcoin: While theoretically possible, a 51% attack on a major blockchain like Bitcoin is highly improbable due to the immense amount of computing power required. The cost of such an attack would likely outweigh any potential gains for the attacker.

How Much Would a 51% Attack on BTC Cost?

If a large mining pool was directed by its managers to conduct an attack, it wouldn’t cost the managers much at the time of the attack. However, it would likely lose its honest miners once they found out about it. For a single person or group to conduct a 51% attack, they would need more than 304 EH/s of computing power. This is an enormous cost considering the fastest miner hashes 406 TH/s and costs more than $10,000 per unit (about 84,000 units).

Estimates suggest that launching a 51% attack on Bitcoin (BTC) would be tremendously expensive, ranging from $5 billion to $20 billion USD. Here’s a breakdown of the factors affecting the cost:

• Hash Rate: Bitcoin’s hash rate, which is a measure of the network’s computing power, is extremely high. To achieve a 51% attack, an attacker would need to control more than half of this hash rate.
• Mining Cost: Mining cryptocurrencies involves using computers to solve complex mathematical problems. The cost of renting or buying this computing power contributes significantly to the overall expense of a 51% attack.

Here are some additional points to consider:

• Fluctuating Costs: The cost of a 51% attack can vary depending on the price of the equipment and electricity needed to run the mining rigs.
• Difficulty Adjustment: The Bitcoin network automatically adjusts its difficulty based on the hash rate. If an attacker increased the hash rate significantly, the difficulty would also rise, making it even more expensive to maintain a 51% attack.

While the exact cost is difficult to pinpoint, it’s safe to say that a 51% attack on Bitcoin is currently not economically feasible for most malicious actors. The massive cost and the potential for the network to adapt make it a very risky proposition.

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The Bottom Line

A 51% attack is the unlikely event that a group will acquire more than 50% of the hashing power of a cryptocurrency network. These attacks happen on smaller crypto networks, but tend to fail on larger ones like Bitcoin because they are more secure.

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