What is 51% Attack ?
A 51 percent assault happens when a single individual or group gains control of more than half of a cryptocurrency network’s computational power or validation authority. Having dominant control over the blockchain of a cryptocurrency allows a group or individual to generate and modify transactions.
How Can Networks Prevent a 51% Attack?
Although proof-of-work networks cannot completely prevent the possibility of a 51 percent attack, there are numerous techniques to reduce it. If no larger coin is mined by the same algorithm, a successful 51 percent assault becomes substantially more expensive for cryptocurrencies that utilise ASIC miners. Bitcoin Cash implemented a ten-block checkpoint system, which makes transactions irreversible after a given amount of time. ASIC miners, ChainLocks, and tweaks to the consensus algorithm have all been used by other cryptocurrencies to safeguard their networks.
What 51% Attacks Mean for Individual Investors
Individual investors shouldn’t be concerned about 51 percent assaults if they invest largely in the major cryptocurrencies, which have the most secure blockchains. The cost and resources necessary to carry out 51 percent assaults against the cryptocurrencies with the highest market values and adoption rates are just too high. A 51 percent attack on a major cryptocurrency could only be considered by state-sponsored hacking gangs.
Limit your exposure to less-established cryptocurrencies that appear hazardous to reduce your likelihood of coping with a 51 percent attack. Knowing about 51 percent attacks is a good starting step toward reducing the chances of one happening to your bitcoin.