51% Attack
A 51% attack refers to a situation in the context of blockchain and cryptocurrencies, where a single entity or group controls more than 50% of the network's mining power, also known as hash rate. This majority control allows them to disrupt the network by carrying out malicious actions, such as:
- Double Spending: The entity could spend the same cryptocurrency twice. Normally, once a transaction is confirmed, it's nearly impossible to reverse. However, with a majority control, they could reverse transactions they've made, effectively spending the same coins more than once.
- Blocking Transactions: They could prevent certain transactions from being confirmed, essentially stopping the transaction from being completed.
- Censoring Blocks: The attacker could prevent other miners from mining valid blocks, allowing only their own blocks to be added to the blockchain.
- Rewriting Parts of the Blockchain: With majority control, they could theoretically rewrite parts of the blockchain to their benefit, although this would require a significant amount of computational power and would be noticeable to other network participants.
It's important to note that carrying out a 51% attack is extremely expensive and difficult, especially on larger, more established networks like Bitcoin. The cost of acquiring the necessary computational power would be prohibitively high, and the potential gains are often outweighed by the massive investment required to execute the attack. Additionally, such an attack would likely undermine the value of the cryptocurrency, further diminishing the attacker's potential gains.