I’ve had several people as me what I think about the possibility of a 51% attack on popular cryptocurrencies like Bitcoin, Ethereum and Litecoin? Since there’s a lot of interest in this topic right now, I thought I’d put the answer out for everyone to see.
A 51% attack is when malicious actors take over more than 50% of the mining network to make fraudulent transactions. To do this they need to hack or take over more than 50% of all systems mining the cryptocurrency in question and do it within the time period in which a block is mined.
So using Bitcoin as an example, to successfully hack the blockchain you’d need to hack the majority of computers mining the network simultaneously. This would be a massive undertaking for Bitcoin. Gobitcoin estimates that hardware costs alone for hacking the Bitcoin blockchain would be almost $7 billion dollars and the electricity needed for all that hardware would be the equivalent of 10 days’ worth of New York City’s energy consumption – about $10 million.
But even if you got past the above, the hack would have to happen within a 10-minute time interval as that’s how often a new block is mined.
So the point is that to be successful, a hacker would have to compromise more than half the computers in the network at the same time…and do it all in under 10 minutes. So you can see that while technically possible, it’s impractical to hack a large blockchain like Bitcoin.
The 51% attacks that have been successful have targeted small networks for altcoins where the practicality of amassing the computing horsepower necessary is possible – assuming that success offers enough of a reward to make it worthwhile. In recent weeks Zencash, Verge, Bitcoin Gold, and Electronium have seen 51% attacks.
So while there are many things to worry about with crypto investing, hacking the blockchain of a major player like Bitcoin or Ethereum isn’t something you have to lose sleep over. Instead, spend a lot more energy making sure your wallets and exchange login credentials are secure.