How to prevent 51% attack
Recently, many crypto currencies were under 51% Double Spend Attack of hackers.
Most noticeable, Bitcoin gold was attacked during 16th to 19th, 2018, May. There was a rolling back of transaction and the loss is up to 388201 BTG (Bitcoin Gold) which worth 18,600,000 dollar.
So what is 51% Double Spend Attack?
Crypto currencies like BTG which based on PoW Consensus mechanism would be attacked by hackers if they have over 51% hashrate of the whole network. Hackers would finish a longer blockchain first and control the transaction confirmation then their attack would be accepted by all nodes in the whole network.
It means that someone could control the transaction to stop or repeat, enable them to spend their coins twice or even more.
Although own 51% hashrate of the whole network means great power, hackers could not do whatever they want, they can only rewrite existing blockchain in a limited way.
With 51% hashrate, they could deny any transactions that they want to ignore but they could not make transactions which never happen or change any existing rules.
Analyzed by team Bitcoin Gold, in 22:37 16th, May, 2018 (UTC), there was a 51% Double Spend Attack on the block height 528735 to the Bitcoin Gold.
Take this attack for example, after this attack, all the transactions after block height 528735 was invalid and result in following influences:
(1) BTG transacted after block height 528735 were rolling back.
(2) BTG received after block height 528735 disappeared.
(3) BTG transacted before block height 528735 were not affected.
In the hypothesis before, the cost of 51% attack is too expensive that it can only be done in theory. However, with the frequently attack on BTG, XVG, Monacoin and so on, people began to realize that 51% attack is true threaten, and the cost of it is much lower than expected.
A website named Crypto51.app calculated theoretic cost per hour of conduct a 51% attack to each crypto currencies based on PoW Consensus mechanism. According to the following picture, cost of 51% attack to BTG is only 3858 dollar per hour.
Centralized hashrate is the primary cause of 51% attack. It is very hard to avoid 51% attack for blockchain based on PoW as the centralized hashrate exist. But we can earn experiences from such attacks by building alert mechanism and valid communication channel to defend us from such attack.
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