Crypto 24 / 7 News

Undoubtedly complex and necessary in the world of cryptocurrencies and NFTs, the ideas that underpin and connect

blockchain technology It’s relatively easy to understand.One of its most important concepts is the so-called “51% attack”.This is an almost unparalleled threat to decentralized technology (and the crypto industry it supports).To understand what it is and its potential far-reaching implications for Web3, we need to look at the foundations of blockchain itself.

A blockchain is a distributed digital database that moves and tracks data in blocks, linked together to form a chain-like record of information flow.The important thing to know here is that a blockchain system is governed by a network of users and computers called nodes.These nodes collectively validate transactions on behalf of centralized data servers maintained by third parties such as banks or big tech companies.

But what is the 51% attack?

Theoretically, the number of validating nodes in a blockchain system corresponds to the security of that network.Successful hacking of the system requires a group or individual to control a majority of the nodes in the system (51% of the nodes) to alter blockchain records and forge transactions involving cryptocurrencies and NFTs.there is.

countless millions value of digital assets.

Essentially, 51% of attacks allow malicious actors to hijack a blockchain network and manipulate transactions within the network to devastating economic impact.

This can be caused by a collusion of groups or individuals controlling the node, or by hackers controlling the node.The higher the number of nodes, the more difficult it is to do this.The Ethereum blockchain reportedly has

Hundreds of thousands of validators For example, in that network there are far fewer other chains.

51% attack example

In March 2022, hackers with ties to the North Korean government compromised five of the nine verification nodes of Ronin, an Ethereum-linked sidechain, in a popular play-and-earn blockchain-based game.succeeded in controlling

Axie InfinityHackers faked withdrawals from the network.approximately $625 million, became the biggest hack in the history of that network.

Once the Ronin team realized what had happened, they took centralized action and completely suspended his blockchain network for several months before resuming transactions in late June.

another

Attack power 51% It happened in 2020 when hackers took control of Bitcoin Gold.Separated from the Bitcoin blockchain Hackers were able to double $72,000 worth of cryptocurrency.

Double spending is when a cryptocurrency is used more than once by him, allowing the individual who initiated the transaction to recover the spent tokens.

What are the chances of a 51% attack?

Vulnerability to this type of attack is directly related to network size.The bigger the blockchain, the more secure it is.For systems running on energy-intensive proof-of-work (PoW) consensus mechanisms (such as Bitcoin), the computational power required for a successful 51% attack is enormous and unlikely..It’s not worth the time and money spent by hackers trying to do so.

However, even if you could do that, there would be no way to disable the physical hardware that would allow an attack on your system.This means that the attack can continue until the network administrator initiates a “hard fork”.A hard fork is a drastic change to the blockchain protocol (basic rule set) that forks into two incompatible versions of her.Such events are often the starting point for new cryptocurrencies, as was the case with Bitcoin Gold.

However, there are ways to discourage the 51% attack.

A Proof-of-Stake (PoS) consensus mechanism, such as the one the Ethereum blockchain runs on, consumes exponentially less energy than a network operated on PoW.They rely on validators to put (stake) an acceptable amount of cryptocurrency as validating nodes.For Ethereum, this is quite a lot at 32 ETH.

In theory, if enough validators in a PoS system collude, they can control the network.Still, even if this happens, Ethereum admins will still be able to “reduce” this staked ETH.This means that a violating node simultaneously loses its investment and ability to attack again.

Ethereum co-founder Vitalik Buterin has addressed this issue

Several times While undesirable, 51% of attacks claim they are not fatal to blockchains.

Decentralization debate

the day before

Ethereum Merger far energy efficiency A working PoS consensus system, Buterin posted a twitter poll In it, he asked how long people wanted to wait before advocating a “special protocol” intervention.Will the community support a centralized body that intervenes and makes decisions across the blockchain in extreme situations?

The question is also not rhetorical.Bitcoin is not the only blockchain that has been forced to hard fork when it comes under attack.In 2016, Ethereum initiated a hard fork.

Flaws exploited by attackers An application running on a blockchain where the administrator of the system rolls back the transaction associated with the exploit to return the user’s funds to them.

Such centralized action is the antithesis to the very concept of blockchain technology.Although the largest single group of respondents to the Buterin poll supported the idea of a centralized intervention, the idea of such action fell short of the comments under the same vote.For the time being, however, they are unfortunately still needed to ensure the stability of these systems when they are sorely needed.

Either way, they continue to be the center of controversial debate in NFT and crypto circles.Much like the discussion around

Decentralized Web3 Marketplaceparadoxically, decentralization by centralized means may be the best way.

#Blockchain #Attack #Stay #Safe

Credit.