The Bitcoin network is one of the most secure types of financial technologies the world has ever seen. Without a central point of failure, or a way to hack the system in general, Bitcoin remains safe from harm. But there is always the looming threat of a 51% attack against the network, which could have dire consequences. But what does such can attack entail, and is it something we should actively worry about?
The 51% Attack is A Threat, Albeit Difficult To Pull Off
The 51% attack vector is a threat that is theoretically possible, yet will be quite difficult to achieve. What this means is how one individual or group of individuals controls more than half of the Bitcoin network’s hashrate. Considering how the current network hashrate sits at just below two exohash per second, obtaining 51% is a logistical challenge most people would not even try to undertake.
At the same time, the Bitcoin network is free and accessible to everyone in the world. Nothing is preventing someone from making an incredibly large investment and turning on mining hardware that can take over the Bitcoin network as a whole. But one would also have to wonder if this would be in the best interest of such a person or group.
Even if someone were to be able to successfully complete a 51% attack, they would not be in full control of the Bitcoin network. Granted, it would be a significant threat, but 51% of the hashrate is not enough to shut down Bitcoin, for example. Hackers could, theoretically, prevent specific transactions from being confirmed on the network. This would have dire consequences for Bitcoin payment processors, as well as general users.
At the same time, assailants would be able to reverse transactions, but only those sent by a wallet they control. If user A and B send transactions, but neither of them is part of the group holding 51% of the network hashrate, their transfers cannot be rolled back. They could go without network confirmations for quite some time, though. Having the option to reverse one’s own transaction and double-spend funds is the primary incentive for attempting a 51% attack. But assailants will not necessarily remain in control for that long, making the whole endeavor quite inefficient to perform.
To put the 51% attack into perspective, one must know that this type of threat is increasingly difficult to pull off. The Bitcoin network has matured over the past few years and has become far more stable as a result. As more miners join the network, they add more computational power. A 51% attack would require at least 51% of that total computational power to succeed–quite a costly endeavor, to say the least.
However, the 51% attack is a feasible threat, and should not be disregarded by any means. With particular mining pools holding large portions of network hashrate, collusion can become quite appealing. It remains doubtful that this will happen anytime soon, and the benefits do not outweigh the costs and logistical hassle by any means.
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