What is a 51% Attack in Bitcoin? You might have heard about a 51% attack. Allow me to explain it in simple language. When a malicious miner controls 51% of the Hashing power in Bitcoin Blockchain to change something in a Blockchain is called a 51% Attack.
A 51% attack is theoretical because it will be too expensive to perform. With current mining power, a miner would require at least 20 Billion USD to perform this attack and I don’t think it is worth the risk.
What can a Miner do with 51% Hashing power?
Even with 51% Hashing power miners cannot steal your Bitcoins because your bitcoins are secured via elliptic curve and SHA256 provides an additional level of security. A miner with 51% Hashing power can just reverse his transaction in which he had already spent the coin and double-spend them.
How does 51% attack work?
Miners always accept the longest chain as a valid version of the Blockchain. In order to reverse the transaction in a Block, a malicious miner has to remove the transaction where he spent the coins and re-mine the Block without that transaction in it, and build the longest chain. When Nodes receive this new longest chain they will reorganize the chain to the new longest chain. Miner will abandon the block where malicious miner’s transaction is included and adopt the new longest chain.
Why this attack is not good for the Malicious Miner either?
If this attack is successful, it is not good for the miner either because people won’t trust the Blockchain network and eventually stop using it. if that happens, Bitcoin will be worthless and Miner’s 20 Billion USD investment is total waste so this attack is theoretical.