51% Attack is considered to be Bitcoin Network’s biggest threat, and for a good reason. While the attack is still hypothetical, it might be highly damaging to the network itself. Just because this possibility is so dangerous, it’s important for anyone interested in Blockchain Technology, to understand exactly what it is.
By the end of this post, you will fully understand what 51% Attack is with all of its consequences. But until we get there, let’s answer few questions first.
What do miners do?
Miners are responsible for adding new blocks to Blockchain. They perform enormous amounts of computations to solve so-called cryptographic puzzle. The first miner, who solves it, adds a new block to its own copy of Blockchain. Next, it propagates its copy through the network, so that all participants have the same copy of Blockchain.
I will talk about mining in great detail in later post. The explanation given above should be sufficient for now.
How Competing Chains are resolved?
What happens if two miners add a block at the same time? This may occur, when two different miners start propagating roughly at the same time. It’s depicted in the illustration below.
This raises a question - which one of two different copies of Blockchain should be adopted?. The general rule of thumb tells:
- Miners keep one of two copies until another block is added.
- The group that has a longer chain, propagates their copy to the whole network.
By now, we have covered enough, to demystify the 51% Attack.
What is 51% Attack?