The Blockchain industry is growing gradually but along with revolutionising the various sectors, the vulnerability of cyber attacks is also increasing. Some of the groups like that of Lazarus of South Korea are constantly engaging in developing sophisticated techniques to attack the Blockchain network and steal the money during the transaction. In this article, we are going to focus one of those Blockchain attacks which seemed to be unrealistic a few years back but has become reality now. Yes! I am talking about 51% attacks. Maybe you have heard it but have you ever wonder how to prevent 51% attack in Blockchain? Let us start exploring the dreadful world 51% attacks and methods to escape them.
What Is A 51% Attack In Blockchain?
Blockchain network is based on a consensus mechanism which confirming the transaction of digital assets from one part to another. All the nodes or participants or systems connected to the network validates the transaction by using their computing power for solving the complex mathematical algorithm, this mechanism is known as “Proof of Work”.Generally, the longest version of Blockchain or that utilises the most computing power to generate or validate block is considered as the correct one and will be given the privilege to update block.
As per 51% attack Wikipedia, when a suspicious actor took the efforts to control a massive percentage of the computing power of the network such that it would able to build and verify blocks much faster than the competing participants, it would certainly result in the network which will accept the version of attackers as the real version for validation of block. With this kind of capturing power, an attacker could have the deciding power for submission of transactions which can be approved and added to the Blockchain. Also, they might use this superpower to create a new “longest chain” which could start from a block which got added before that transactions to the blockchain, as that new longest chain would not include the transactions (which are meant to be erased). Thus, there might be a fear of double-spending of digital assets but it is nearly impossible as Nakamoto explained in the whitepaper that attackers cannot create value out of thin air or take money which never belonged to that attacker.
Six Steps Of 51% Attack | How Does It Takes Place?
To unfold the solutions for the dangerous attack, you need to understand the process of attack to break the chain and have the solution. So to get the answer for how to prevent 51% attack in Blockchain, we should first know how does attack take place. Let us briefly understand the Six steps 51% attack:
- Firstly, an attacker tries to gain control of a majority or 51% of the peer-to-peer network of Blockchain.
- Then, the process of secret mining starts on an alternative Blockchain, running parallel to the chain on which rest of the nodes of the network mine. While mining the new blocks, the attacker does not disclose it to the other 49% participants of the network.
- In the next step, the attackers try to transfer some of the crypto coins native to the Blockchain which is intended to attack. Most of the times, attackers trade the funds on the centralized exchange (as the fraudulent chain does not acknowledge the transaction),
- Process of mining the blocks continue until the fraudulent chain become longer than the actual chain and the blocks mined remain announced till that time.
- After the chain become the longest one, the attacker announces the blocks mined to the remaining 49% of participants and as per the “longest chain rule”, the remaining network was compelled to accept the fraudulent chain of blocks.
- Finally, the attacker can enjoy the funds spent again (double spending) which was not recorded on the accepted chain. That is how a 51% attack takes place (The risk of a 51 attack is high in a private blockchain)
How To Prevent 51 Percent Attack?
With a number of technological innovations, real-world has offered valuable insights to inform the developments of the next generation. So, the developer team of Blockchain can reconsider the following points to avoid the terror of the 51% attack.
Attack Resistance Mechanism
Designing of the Blockchain can be strengthened so as to detect and resist the 51 per cent attack. For instance, Horizon (formerly ZenCash) in their whitepaper explained that “Block acceptance time delay” for alternative Blockchain (that is created by an attacker) can be kept hidden till the attacker announced the longest chain. This mechanism could penalize attacker accordingly based on the number of blocks added on the fraudulent chain.
Alternative Consensus Mechanisms
Consensus mechanism of “Proof-of-work” is deployed mostly by every Blockchain network which is highly vulnerable to 51% attack as the cost incurred by the attacker is nominal to convince to other participants and group up to conquer 51% of computing power. Proof-of-stake, Delayed Proof-of-work and few more are trying to reinvent the Blockchain industry by minimising the chances of 51 per cent of attacks.
Hash Rate Level Playing Field
In the crypto space, better the hashing rate or computing power faster will be the rate of mining the block. To protect the network from the fraudulent chain, guarding against computing or hashing power can be considered by deploying some of the measures like that of quantum computing to maximize the decentralisation of hash rate.
Governance of Private And Hybrid Blockchain
In terms of a private Blockchain, the number of nodes is significantly lesser than that of public Blockchain with some degree of centralisation. In private Blockchain, risk of the 51% attacks is the highest. Thus, it becomes important that the coding of the governance mechanism must be strengthened to anticipate the scenarios and resist the attack.
Bitcoin attack history briefs that successful 51% attacks include even reputable exchanges, proving that threat is real which must be taken care of seriously to accelerate the Blockchain environment and diversify the network. Every Blockchain must consider the 51 per cent attack cost not only in terms of loss funds but also in terms of negative media coverage, reduction in trust, chances of delisting from crypto exchanges and also in decreased likelihood in the investments. As the industry is expanding at a higher pace- it would surely come with the flooded responses to how to prevent 51% attack in Blockchain.