Security has always been a prime concern for new investors in cryptocurrency. As with any emerging technology, blockchain has investors asking questions about security, stability and future development. In the modern world security is a very important and delicate topic, especially when it comes to cryptocurrency. Recently a form of attack, which was considered more theoretical than actual, has started to be seen.
The 51% attack wasn’t taken serious too long ago
The 51% attack is a term, which refers to an attack on the blockchain. The attack has the goal of using miners to control more than 50% of a network’s computing power or hash rates. This would potentially allow the attackers to halt new transactions and prevent payments between some users.
This will also allow for transactions to be reverted, which would lead to coins being “double-spent”. This can only happen while the attackers are in control of the network. However the above mentioned scenario will not allow attackers to create new coins or alter older blocks. In a way this can never lead to endless money printing.
Recently there has been cause for concern. In the last few weeks at least four cryptocurrencies have been targeted with such an attack. Now this would mean that attackers have been able to amass a serious amount of computing power to pull off a sort of a crypto heist.
This requires an incredible amount of resources, especially when we take into account that there were many such attempts in the past, but almost none of them were successful. Many experts on the subject have come out and said these attacks are far too costly and the payout wouldn’t be sufficient.”Making money” this way has a lot of requirements, even for the attackers.
The 51% attack has a big price, for both sides
The 51% attack makes criminals “work” for their “earnings”. Even if they have “stolen” the majority of the computing or hash power, they don’t have unlimited freedom. They do however, possess the ability to “double-spend” on some transactions under some special conditions.
This is not a winning strategy for all the computing power required, unless you can pull out millions of dollars. This is why the exchanges, which were targeted, were holding millions in cryptocurrency. Litecoin cash, zencash, bitcoin gold, monacoin have all been targeted. Now due to the extreme amount of resources required and their unlikely success, these attacks were pretty rare, but they have recently begun to appear far more frequently.
A clear reason for these attacks is nearly impossible to pinpoint. It’s also very easy to note why smaller coins are the ones targeted. Due to smaller size in their mining population, it’s easier to buy-out or rent the hash/computing power needed to perform the attack. As stated above, the payout wouldn’t be as huge as if the attack was successful on a larger coin, but it would still leave the attackers with a nice financial gain.
Bitcoin and and other larger coins are supposedly still too big to take down. As the 2008 financial crash has taught us, nothing is too big to fail, especially when it comes to modern finance. Things have progressed fast since 2008 and we need to be smarter and more careful than ever before. As professor Emin Gün Sirer tweeted out:
The cost to 51% attack various coins. Most of these coins cost a pittance to attack. If your savings are in a coin, or anything else, that costs less than $1m/day to attack, you should reconsider what you are doing.https://t.co/WcyW0vfcuS
— Emin Gün Sirer (@el33th4xor) May 30, 2018
The 51% attack is definitely a cause for concern.Another cause is Cryptojacking. It’s very important to take these attacks seriously because cryptocurrencies have the potential to be the future of finance and economics. The future needs to be stable and build on a strong and a reliable foundation.
You can also check out:
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- United States Army Looking For Blockchain Experts - Sep 18, 2019
- Kraken Bug Allowed the Purchase of Bitcoin Below Market Price - Sep 17, 2019
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