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Is your cryptocurrency at risk of a 51% attack?

Half plus one attacks could theoretically happen to any Proof of Work based cryptocurrency.

The amount of risk of such an attack happening depends on several factors, including the number of miners who participate in the network, the distribution of hashrate among the miners, the existence of unknown and exploitable security flaws and other factors.

Decentralization is the key

The number of miners who participate in a given PoW based cryptocurrency network, and the distribution of hashrate among them, determines how centralized the mining network is.

If a single miner were to dominate mining for a given cryptocurrency, then no consensus mechanism would be needed. Their single decision is the consensus. If two miners were competing, then you’d hope for a 50-50% distribution of mined blocks. And so on.

Perfect decentralization would require a uniform distribution of mining power, such as the original Satoshi vision for Bitcoin where everyone running a node would be able to mine a certain number of coins per day, along with everyone else.

The problem is, in reality, there isn’t a perfectly uniform distribution of mining power.

Big investors put billions of dollars into the research and development of ASIC miners which completely dominated the Bitcoin mining scene. A individual node has absolutely no power in today’s Bitcoin network. So, how likely is it that one of these sharks could obtain 51% of all the Bitcoin hashrate and then decide the consensus by themselves? It turns out that it’s not very likely.

In the following video, Andreas Antonopoulos explains how difficult and expensive it’d be for a State-power to try and subvert the Bitcoin system for a single block reward:

Power to The People

The concept here is very clear: Bitcoin is secure because there are millions of miners around the world and 51% of the hashrate is not concentrated in the hands of few.

Attempting to defraud the Bitcoin system would require millions of U$ in investment and the attacker would have less than 10 minutes to attempt to inject a specially crafted block and achieve consensus for it on the entire network.

Then they’d need to validate that block for at least 3 blocks after, or ~30 minutes, in order to fully commit invalid data into the blockchain.

This is unfeasible in practice thanks to the total mining power on the Bitcoin network.

So, is your altcoin at risk of a 51% attack? It could well be. Obscure coins that don’t have very many miners working on them, which may have corrupt mining pool owners behind the network, could well be at risk of a half plus one attack. Proof of Stake coins with obscure origins, which show little or no transparency,

51% Attacks Are Not Rare

In recent days, even well known altcoins suffered 51% attacks. ZenCash suffered a 51% attack 48 hours ago and Verge had a 51% attack last month as well. A few weeks ago Bitcoin Gold suffered an attack. Monacoin and Electroneum have also been recent targets of 51% attacks.

What can you do to avoid such an attack? First of all keep an eye on some attack cost tracking tool: many can be found via web search. If you see the attack cost get too low, especially if it’s lower than the block reward for your coin, then you should start worrying. The whole idea of Proof of Work is that the attack cost is a lot higher than the potential reward. Once this principle no longer holds, then it becomes convenient to attempt an attack.

About the Author
Published by Crypto Bill - Bill is a writer, geek, crypto-curious polyheurist, a dog's best friend and coffee addict. Information security expert, encryption software with interests in P2P networking, decentralized applications (dApps), smart contracts and crypto based payment solutions. Learn More About Us