By Charlotte Kng
What is a 51% Attack?
If the name of the scheme doesn’t give it away already, the refers to a breach of a ’s security by a group of miners who dominate more than half its hashing power — the core behind the ’s tamper-proof legitimacy.
’s Big Bully
A typical miner’s job scope revolves around validating payment transactions to be added to the ’s distributed . requires heaps of hashing power supplied by a special computer’s algorithm-solving ability, and its sheer difficulty renders security so formidable: it makes validation tough and falsification even tougher. Validated transactions become tamper-proof and immutable as they join the — like Lego blocks superglued together.
Majority Rewrites The Rules
Tampering with Transactions
Yet, with lording power as the majority, these attackers can prevent new transactions from being validated on their watch, effectively halting payments between select users. Cases of miners scrambling to be the first to validate a transaction aren’t new, but intentionally monopolising enough power to confirm majority of the transactions and, as a result, preventing other miners from completing blocks jeopardizes the efficiency and security of the entire whilst skewing the coin returns in the majority’s favour.
Double Spending
With enough hashing power pooled together, miners can also indulge in double spending: sending a payment and then reversing it to act like they’d never spent it in the first place. A perfect counterfeit rests in their wallets while they prevent other miners from validating their transactions. Think reversing your credit card transactions on credit terminal without reporting it on the sales log — you’ll get an exact copy of your money back in your account while still looking as if you paid on the system’s log.
With a majority of the miners in charge of transaction-proofing linked up in cahoots and no centralized force in the sphere, who’s going to nab these attackers red-handed?
How to Prevent a 51% Attack
Prevent Pools from Becoming Too Big
Ghash.io is the world’s biggest pool for — . While it seems to be a highly attractive pool for reward-seekers, the imminent threat of amassing 51% control and shaking investor confidence in security has pressured Ghash.io miners into consider reducing their hold.
The final call was forcefully made by Ghash.io’s own partner, designer BitFury, who relocated its service to its own pool in order to force down Ghash.io’s share to a less threatening 30% hold. It may not look difficult to pre-empt a 51% attack, but convincing miners to leave a major pool and its perks is easier said than done.
Safeguard Your Protocol
51% Attacks are usually targeted at smaller-scale bitcoins with millions to lose — Gold, cash and a slew of others are amongst victims of this attack. Instead of targeting the long-standing , attackers often target bitcoins with shaky protocols and a scattered distribution of miners. Their aim: swoop in to claim majority power, rearrange transactions and flee with the loot after fraudulently tampering with a big-ticket transaction.
As a potential target, fledgling bitcoins should focus on building safer protocols with the help of an expert pair of eyes to review possible loopholes. Don’t just build a house; build an impenetrable fortress.
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Published at Fri, 04 Jan 2019 10:03:51 +0000
