ᐅ 51% Attack in Cryptocurrencies ⚡ Understanding & Protection

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What is a 51% Attack in Cryptocurrencies?

What is a 51% Attack in Cryptocurrencies?

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The 51% attack is applied to blockchains built on the Proof-of-Work (PoW) consensus mechanism. Such blockchains require a large amount of computational power to maintain their operation, which is provided by miners. It is the miners who, through complex calculations based on a given algorithm using their equipment, ensure transaction validation and, consequently, the mining of new coins.

PoW ensures the decentralization of the network since the blockchain is managed by numerous people worldwide independently. However, there is a loophole in the form of a hacker attack on the network.

The 51% attack implies that if an attacker gains control of 51% of all computational power of the blockchain, they can create an alternative chain of blocks. As a result of obtaining this chain of blocks, the mining of new tokens and transaction validation may come to a halt.