What can an attacker with 51% of hash power do? Bitcoin Stack Exchange

blockchain fifty one attack

Actually, it’s very effortless to do harm to the network once you have 51%; just build your own chain quicker than the network, and broadcast it whenever you like. If you send some of your coins to a fresh address in your own chain, all the transactions issued in the live network by spending those same coins will be reversed at the moment the longer chain is broadcast.

Right from the bitcoin wiki (most likely proof-read by many pairs of eyes) :

An attacker that controls more than 50% of the network’s computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This permits him to:

  • Switch roles transactions that he sends while he’s in control
  • Prevent some or all transactions from gaining any confirmations
  • Prevent some or all other generators from getting any generations

The attacker can’t:

  • Switch sides other people’s transactions
  • Prevent transactions from being sent at all (they’ll demonstrate as 0/unconfirmed)
  • Switch the number of coins generated per block
  • Create coins out of skinny air
  • Send coins that never belonged to him

It’s much more difficult to switch historical blocks, and it becomes exponentially more difficult the further back you go. As above, switching historical blocks only permits you to exclude and switch the ordering of transactions. It’s unlikely to switch blocks created before the last checkpoint.

Since this attack doesn’t permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always build up more by just following the rules, and even someone attempting to ruin the system will very likely find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or unlikely to “untangle” the mess created — any switches the attacker makes might become permanent.

In theory, this attacker possesses enough computing power that they could execute a “dual spend” attack. They could spend coins in one place, permit the coins to come in the block chain as normal until the required confirmations are met, then fire up their 51% of the miners to craft a fraudulent fork of the block chain in which those coins were never spent, permitting them to re-spend the coins. This could theoretically be repeated for as long as the attacker maintained control of 51% or more of the hashrate.

Realistically, 51% is only the point at which this becomes possible not the point at which it becomes likely or effortless. An attacker would very likely need something like 65% to actually execute such an attack.

And then there is the denial of service possibility of abruptly withdrawing from the service, taking the necessary computing resources away to proceed to solve blocks every ten minutes until the difficulty is adjusted down again (which could take a long time if there is only a block every day for example).

Of course, for that one would need much more than 51% of hash power.

The answers so far concentrate on the algorithm itself, I have a few social economic thoughts to add.

Let’s assume Bitcoin is massively popular and indeed becomes THE global go-to currency, at this point this and similar questions become (very) relevant.

What happens in maturing industries is that through commoditization and mergers smaller and smaller numbers of players remain. Through scale advantages this puny number of players will be able to provide services at lower cost and squeeze out smaller players. I see little reason the industry of Bitcoin transaction processing will be exempt from this general rule.

Next, we cannot foresee every aspect of the future, even tho’ the Bitcoin designers did a terrific job there will be situations that will call for switches to the system. For example there might be a call from the people to stop child porn networks, to stop capital shelters for the rich, to stop overly profitable and powerful corporations. etcetera, you name it. Whether justified or not, the people will request for switches, not necessarily a villain government individual, the people.

Since there is only a puny number of players it is actually possible to regulate the industry. For example the regulation could be that only payments with a traceable account number will be processed, or only payments with fastened fees that include a portion for tax.

I would think the government could even request switches to the core of the algorithm. Preventing, for example, “non-certified” players to inject, thereby further establishing the power of the existing payment processors.

The freshly elected monopolists will then, in the final phase of capitalism self-destruction leisurely but steadily raise their processing prices, eventually driving customers away and causing the Bitcoin to never reach the deflationary status many proponents and early investors claim it will have.

And let’s just hope it completes this way, a forking screenplay from this could be that the Bitcoin reaches “too big to fail” status, and the people request further regulation (of processing fees, mining speed caps, etc). We will all keep paying a premium on the existence of the currency, just for the sake of stability and the fear for disruption of the status quo. Just like with today’s currencies.

I’m not attempting to be skeptical, I’m actually very hopeful the crypto currencies are going to help with globalization and advance humanity. As a deflationary currency to “lightly” save for your (early) retirement I am not so sure. As a transaction system most likely in some way.

Maybe we don’t actually need a “currency” maybe all we need is a transaction. Maybe there can be a super layer on top of numerous challenging crypto currencies that quickly and automatically switches your money back and forward inbetween the best suitable mix of currencies and investment funds. After all what you truly care about is how your salary is exchanged into goods and future promises.

What can an attacker with 51% of hash power do? Bitcoin Stack Exchange

blockchain fifty one percent

Actually, it’s very effortless to do harm to the network once you have 51%; just build your own chain swifter than the network, and broadcast it whenever you like. If you send some of your coins to a fresh address in your own chain, all the transactions issued in the live network by spending those same coins will be reversed at the moment the longer chain is broadcast.

Right from the bitcoin wiki (very likely proof-read by many pairs of eyes) :

An attacker that controls more than 50% of the network’s computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This permits him to:

  • Switch sides transactions that he sends while he’s in control
  • Prevent some or all transactions from gaining any confirmations
  • Prevent some or all other generators from getting any generations

The attacker can’t:

  • Switch roles other people’s transactions
  • Prevent transactions from being sent at all (they’ll showcase as 0/unconfirmed)
  • Switch the number of coins generated per block
  • Create coins out of skinny air
  • Send coins that never belonged to him

It’s much more difficult to switch historical blocks, and it becomes exponentially more difficult the further back you go. As above, switching historical blocks only permits you to exclude and switch the ordering of transactions. It’s unlikely to switch blocks created before the last checkpoint.

Since this attack doesn’t permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always build up more by just following the rules, and even someone attempting to ruin the system will most likely find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or unlikely to “untangle” the mess created — any switches the attacker makes might become permanent.

In theory, this attacker wields enough computing power that they could execute a “dual spend” attack. They could spend coins in one place, permit the coins to come in the block chain as normal until the required confirmations are met, then fire up their 51% of the miners to craft a fraudulent fork of the block chain in which those coins were never spent, permitting them to re-spend the coins. This could theoretically be repeated for as long as the attacker maintained control of 51% or more of the hashrate.

Realistically, 51% is only the point at which this becomes possible not the point at which it becomes likely or effortless. An attacker would most likely need something like 65% to actually execute such an attack.

And then there is the denial of service possibility of abruptly withdrawing from the service, taking the necessary computing resources away to proceed to solve blocks every ten minutes until the difficulty is adjusted down again (which could take a long time if there is only a block every day for example).

Of course, for that one would need much more than 51% of hash power.

The answers so far concentrate on the algorithm itself, I have a few social economic thoughts to add.

Let’s assume Bitcoin is massively popular and indeed becomes THE global go-to currency, at this point this and similar questions become (very) relevant.

What happens in maturing industries is that through commoditization and mergers smaller and smaller numbers of players remain. Through scale advantages this puny number of players will be able to provide services at lower cost and squeeze out smaller players. I see little reason the industry of Bitcoin transaction processing will be exempt from this general rule.

Next, we cannot foresee every aspect of the future, even tho’ the Bitcoin designers did a terrific job there will be situations that will call for switches to the system. For example there might be a call from the people to stop child porn networks, to stop capital shelters for the rich, to stop overly profitable and powerful corporations. etcetera, you name it. Whether justified or not, the people will request for switches, not necessarily a villain government individual, the people.

Since there is only a petite number of players it is actually possible to regulate the industry. For example the regulation could be that only payments with a traceable account number will be processed, or only payments with fastened fees that include a portion for tax.

I would think the government could even request switches to the core of the algorithm. Preventing, for example, “non-certified” players to come in, thereby further establishing the power of the existing payment processors.

The freshly elected monopolists will then, in the final phase of capitalism self-destruction leisurely but steadily raise their processing prices, eventually driving customers away and causing the Bitcoin to never reach the deflationary status many proponents and early investors claim it will have.

And let’s just hope it completes this way, a forking screenplay from this could be that the Bitcoin reaches “too big to fail” status, and the people request further regulation (of processing fees, mining speed caps, etc). We will all keep paying a premium on the existence of the currency, just for the sake of stability and the fear for disruption of the status quo. Just like with today’s currencies.

I’m not attempting to be skeptical, I’m actually very hopeful the crypto currencies are going to help with globalization and advance humanity. As a deflationary currency to “lightly” save for your (early) retirement I am not so sure. As a transaction system very likely in some way.

Maybe we don’t actually need a “currency” maybe all we need is a transaction. Maybe there can be a super layer on top of numerous challenging crypto currencies that quickly and automatically switches your money back and forward inbetween the best suitable mix of currencies and investment funds. After all what you truly care about is how your salary is exchanged into goods and future promises.

What can an attacker with 51% of hash power do? Bitcoin Stack Exchange

blockchain fifty one percent attack

Actually, it’s very effortless to do harm to the network once you have 51%; just build your own chain quicker than the network, and broadcast it whenever you like. If you send some of your coins to a fresh address in your own chain, all the transactions issued in the live network by spending those same coins will be reversed at the moment the longer chain is broadcast.

Right from the bitcoin wiki (most likely proof-read by many pairs of eyes) :

An attacker that controls more than 50% of the network’s computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This permits him to:

  • Switch sides transactions that he sends while he’s in control
  • Prevent some or all transactions from gaining any confirmations
  • Prevent some or all other generators from getting any generations

The attacker can’t:

  • Switch roles other people’s transactions
  • Prevent transactions from being sent at all (they’ll demonstrate as 0/unconfirmed)
  • Switch the number of coins generated per block
  • Create coins out of skinny air
  • Send coins that never belonged to him

It’s much more difficult to switch historical blocks, and it becomes exponentially more difficult the further back you go. As above, switching historical blocks only permits you to exclude and switch the ordering of transactions. It’s unlikely to switch blocks created before the last checkpoint.

Since this attack doesn’t permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always build up more by just following the rules, and even someone attempting to demolish the system will most likely find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or unlikely to “untangle” the mess created — any switches the attacker makes might become permanent.

In theory, this attacker possesses enough computing power that they could execute a “dual spend” attack. They could spend coins in one place, permit the coins to inject the block chain as normal until the required confirmations are met, then fire up their 51% of the miners to craft a fraudulent fork of the block chain in which those coins were never spent, permitting them to re-spend the coins. This could theoretically be repeated for as long as the attacker maintained control of 51% or more of the hashrate.

Realistically, 51% is only the point at which this becomes possible not the point at which it becomes likely or effortless. An attacker would most likely need something like 65% to actually execute such an attack.

And then there is the denial of service possibility of all of a sudden withdrawing from the service, taking the necessary computing resources away to proceed to solve blocks every ten minutes until the difficulty is adjusted down again (which could take a long time if there is only a block every day for example).

Of course, for that one would need much more than 51% of hash power.

The answers so far concentrate on the algorithm itself, I have a few social economic thoughts to add.

Let’s assume Bitcoin is massively popular and indeed becomes THE global go-to currency, at this point this and similar questions become (very) relevant.

What happens in maturing industries is that through commoditization and mergers smaller and smaller numbers of players remain. Through scale advantages this puny number of players will be able to provide services at lower cost and squeeze out smaller players. I see little reason the industry of Bitcoin transaction processing will be exempt from this general rule.

Next, we cannot foresee every aspect of the future, even tho’ the Bitcoin designers did a terrific job there will be situations that will call for switches to the system. For example there might be a call from the people to stop child porn networks, to stop capital shelters for the rich, to stop overly profitable and powerful corporations. etcetera, you name it. Whether justified or not, the people will request for switches, not necessarily a villain government individual, the people.

Since there is only a puny number of players it is actually possible to regulate the industry. For example the regulation could be that only payments with a traceable account number will be processed, or only payments with affixed fees that include a portion for tax.

I would think the government could even request switches to the core of the algorithm. Preventing, for example, “non-certified” players to inject, thereby further establishing the power of the existing payment processors.

The freshly elected monopolists will then, in the final phase of capitalism self-destruction leisurely but steadily raise their processing prices, eventually driving customers away and causing the Bitcoin to never reach the deflationary status many proponents and early investors claim it will have.

And let’s just hope it completes this way, a forking script from this could be that the Bitcoin reaches “too big to fail” status, and the people request further regulation (of processing fees, mining speed caps, etc). We will all keep paying a premium on the existence of the currency, just for the sake of stability and the fear for disruption of the status quo. Just like with today’s currencies.

I’m not attempting to be skeptical, I’m actually very hopeful the crypto currencies are going to help with globalization and advance humanity. As a deflationary currency to “lightly” save for your (early) retirement I am not so sure. As a transaction system very likely in some way.

Maybe we don’t actually need a “currency” maybe all we need is a transaction. Maybe there can be a super layer on top of numerous contesting crypto currencies that quickly and automatically switches your money back and forward inbetween the best suitable mix of currencies and investment funds. After all what you indeed care about is how your salary is exchanged into goods and future promises.

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