What is a 51% attack?
51% Attack is a situation where an individual or organization takes control of more than 50% of the computing power (Hashrate) or the amount of staking tokens of a blockchain network.
According to analysis from Tan Phat Digital, when holding majority power, an attacker has the ability to ability to manipulate the ledger by blocking new transactions or reversing already made transactions to double-spending. This directly breaks the immutability - the core value of blockchain technology.
Purpose and Practical Implications of the attack
The ultimate goal of the attacker is not only destruction but often aims at financial gain through the following forms:
Performing Double-spending:The attacker sends money to an exchange, withdraws it, then uses control 51% control to "clear" the initial deposit transaction. As a result, they both get the cash and keep the crypto.
Transaction Denial of Service: By not including other users' transactions in blocks, attackers can freeze the activity of certain addresses.
Mining Monopoly: Prevent other miners from finding a valid block to capture the entire block reward (Block Rewards).
Confidence implications: Even if no money is lost, a 51% attack on a blockchain will cause the coin value to drop dramatically because users lose trust in the security capabilities that Tan Phat Digital always emphasizes as a vital factor for the project.
Mechanism of action: Why is 51% the "death number" god"?
Blockchain operates on the principle of "The majority is truth". The attack process usually goes like this:
Longest Chain Rule: Nodes in the network always consider the chain with the most computational effort to be the valid chain.
Create a secret chain: An attacker possessing more than 50% of the power will silently mine a chain of private blocks (private chain) without publishing it to the network mesh.
Overwrite history: Because it has more power than the rest of the world combined, the attacker's secret chain will grow faster than the public chain.
Publishing and takeover: When the attacker publishes this longer chain, the network automatically abandons the old chain. Any transactions on the old chain that are not on the new chain will be completely reversed.
Real-life example: In 2018, Bitcoin Gold (BTG) was hit by a 51% attack. The attacker controlled the hashrate large enough to reverse transactions on the exchange, appropriating more than 18 million USD.
Relation to the Impossible Trinity (Blockchain Trilemma)
Trade-offs in blockchain design determine resistance to 51% attacks. Below are in-depth perspectives from Tan Phat Digital:
Decentralization: The fewer nodes (concentration of power), the easier it is for an attacker to bribe or take control of 51%. The more distributed the blockchain, the higher the cost of attack.
Security: A secure system requires the cost to achieve 51% strength is extremely large. For example, attacking Bitcoin requires billions of dollars in electricity and hardware.
Scalability: To increase speed, many projects reduce the number of validating nodes or reduce algorithmic difficulty. This unintentionally weakens security, making the network more vulnerable.
Conclusion: A blockchain that prioritizes speed too much and sacrifices decentralization will easily become a target for control attacks.
Why is Bitcoin more difficult to attack than small Altcoins?
The reason lies in the opportunity cost and financial barrier that Tan Phat Digital has compiled:
The giant network:Bitcoin's hashrate is so large that no single organization or country has enough hardware (ASIC) and energy resources to maintain 51% for a long time.
Economic benefits: If a group of miners is strong enough to attack Bitcoin, continuing to mine honestly will bring more sustainable profits than attacking and collapsing the value of the coin they are holding.
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