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Well now that I have a place to ask this question... Could someone explain to me about 51% attacks and if bitcoin is vulnerable to one? Hypothetically, a gove

Well now that I have a place to ask this question... Could someone explain to me about 51% attacks and if bitcoin is vulnerable to one? Hypothetically, a government decides to put forward enough resources to perform a 51% attack on bitcoin. Is that possible? If not, why? And is this something to actually worry about, or could something be done to combat it?

poyu 7y ago
Happened to Bitcoin Gold a while back, here's a good explanation https://forum.bitcoingold.org/t/anatomy-of-a-double-spend-51-attack/1398 https://forum.bitcoingold.org/t/anatomy-of-a-double-spend-51... Edit: a word
rtkwe 7y ago
In a degenerate case with enough power a single entity could mine several blocks faster than the main chain can mine one. In that environment they would be able to reverse any given transaction essentially by making a transaction waiting for that to get several confirmations (blocks created after that transaction is included) and waiting for whatever real world purchase went through then releasing the other blocks they had mined without that transaction included. The client is programmed to chose the longest chain available so the old public chain is abandoned in favor of the attackers new chain which doesn't include the initial spend. Now according to the blockchain Alice never sent Bob the BTC so the money is back in Alice's address and Bob is out whatever real world or off chain changes were made. There's two ways to do this either tactically to reverse your own transactions or randomly to essentially screw over everyone and sow FUD in the reliability of BTC transactions. One good note is as far as I know the Lightning network shouldn't really be vulnerable to this (except maybe for channel opening?) because either party can submit the most recent transaction and have it reflect on the BTC chain.
deleted 7y ago
[deleted]
lawn 7y ago
I wrote a chapter on how cryptocurrencies work and what a 51% is in a hopefully approachable manner[0]. Basically the security assumption in Bitcoin is that at least 50% of miners are honest and work for a profit. A 51% attacker can recreate the latest blocks and remove all transactions from them, effectively the ability to reverse payments. Hypothetically the government can gain 51% hashrate. For example China could take control of all miners there (currently more than 50%) and use them to attack the chain. This type of attack can be detected. An extreme type of defense is to change the proof-of-work algorithm, making all existing miners worthless. This has been done several times in Monero for example. [0]: https://whycryptocurrencies.com/how_do_cryptocurrencies_work.html https://whycryptocurrencies.com/how_do_cryptocurrencies_work...
burnte 7y ago
When you control 51% of the nodes you can make them agree to anything and takeover the network. Yes, BTC is vulnerable. A few years ago China has >50% of the nodes for a bit, making people nervous. The problem there is that then people lose faith in the network, and don't honor transactions, and it collapses in value.
- legohead 7y ago
  I've seen this "lose faith" brought up a few times. What I don't understand, is since this vulnerability still exists, why haven't people lost faith already?
  - mirceal 7y ago
    the working assumption is that an attack like this is really hard to pull off (financial and technical barriers). Also, the older the blocks in the chain, the harder it is (the more new blocks you have to compute and propagate).
- lawn 7y ago
  > you can make them agree to anything No you can't. You have the power to prevent or revert transactions, and that's it. You cannot print unlimited money for yourself or steal coins from an address you don't control.

poyu 7y ago

Happened to Bitcoin Gold a while back, here's a good explanation https://forum.bitcoingold.org/t/anatomy-of-a-double-spend-51-attack/1398 https://forum.bitcoingold.org/t/anatomy-of-a-double-spend-51... Edit: a word

rtkwe 7y ago

In a degenerate case with enough power a single entity could mine several blocks faster than the main chain can mine one. In that environment they would be able to reverse any given transaction essentially by making a transaction waiting for that to get several confirmations (blocks created after that transaction is included) and waiting for whatever real world purchase went through then releasing the other blocks they had mined without that transaction included. The client is programmed to chose the longest chain available so the old public chain is abandoned in favor of the attackers new chain which doesn't include the initial spend. Now according to the blockchain Alice never sent Bob the BTC so the money is back in Alice's address and Bob is out whatever real world or off chain changes were made. There's two ways to do this either tactically to reverse your own transactions or randomly to essentially screw over everyone and sow FUD in the reliability of BTC transactions. One good note is as far as I know the Lightning network shouldn't really be vulnerable to this (except maybe for channel opening?) because either party can submit the most recent transaction and have it reflect on the BTC chain.

deleted 7y ago

[deleted]

lawn 7y ago

I wrote a chapter on how cryptocurrencies work and what a 51% is in a hopefully approachable manner[0]. Basically the security assumption in Bitcoin is that at least 50% of miners are honest and work for a profit. A 51% attacker can recreate the latest blocks and remove all transactions from them, effectively the ability to reverse payments. Hypothetically the government can gain 51% hashrate. For example China could take control of all miners there (currently more than 50%) and use them to attack the chain. This type of attack can be detected. An extreme type of defense is to change the proof-of-work algorithm, making all existing miners worthless. This has been done several times in Monero for example. [0]: https://whycryptocurrencies.com/how_do_cryptocurrencies_work.html https://whycryptocurrencies.com/how_do_cryptocurrencies_work...

burnte 7y ago

When you control 51% of the nodes you can make them agree to anything and takeover the network. Yes, BTC is vulnerable. A few years ago China has >50% of the nodes for a bit, making people nervous. The problem there is that then people lose faith in the network, and don't honor transactions, and it collapses in value.

legohead 7y ago
I've seen this "lose faith" brought up a few times. What I don't understand, is since this vulnerability still exists, why haven't people lost faith already?
- mirceal 7y ago
  the working assumption is that an attack like this is really hard to pull off (financial and technical barriers). Also, the older the blocks in the chain, the harder it is (the more new blocks you have to compute and propagate).
lawn 7y ago
> you can make them agree to anything No you can't. You have the power to prevent or revert transactions, and that's it. You cannot print unlimited money for yourself or steal coins from an address you don't control.