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Bitcoin Majority Attack

Twenty Percent And A Few Days: Optimising A Bitcoin Majority Attack

Twenty Percent And A Few Days: Optimising A Bitcoin Majority Attack

Fehnker, A. , & Chaudhary, K. (2018). Twenty Percent and a Few Days: Optimising a Bitcoin Majority Attack . In A. Dutle, C. Muoz, & A. Narkawicz (Eds.), NASA Formal Methods: 10th International Symposium, NFM 2018 Newport News, VA, USA, April 17-19, 2018 Proceedings (pp. 157-163). (Lecture Notes in Computer Science; Vol. 10811). Cham: Springer. Fehnker, Ansgar ; Chaudhary, Kaylash. / Twenty Percent and a Few Days : Optimising a Bitcoin Majority Attack . NASA Formal Methods: 10th International Symposium, NFM 2018 Newport News, VA, USA, April 17-19, 2018 Proceedings. editor / Aaron Dutle ; Csar Muoz ; Anthony Narkawicz. Cham : Springer, 2018. pp. 157-163 (Lecture Notes in Computer Science). @inproceedings{cca2258c69b74543b0cdc199447dae00, title = "Twenty Percent and a Few Days: Optimising a Bitcoin Majority Attack", abstract = "Bitcoin is a distributed online payment system that organises transactions into blocks. The size of blocks is limited to 1 megabyte, which also limits the number of transactions per second that can be confirmed. This year several attempts have been made to create a fork or a split that removes this restriction. One such alternative is Bitcoin Unlimited (BTU). Proponents of BTU have suggested to use a type of majority attack to force other Bitcoin miners to adopt BTU.", author = "Ansgar Fehnker and Kaylash Chaudhary", Continue reading >>

Bitcoin Gold's 51% Attack Is Every Cryptocurrency's Nightmare Scenario Quartz

Bitcoin Gold's 51% Attack Is Every Cryptocurrency's Nightmare Scenario Quartz

All that glitters. (Reuters/Sergei Karpukhin) Bitcoin Gold is a fork, or spin-off, of the original cryptocurrency, bitcoin. It shares much of the same code and works in a similar way to bitcoin, with Bitcoin Gold miners contributing computational power to process new transactions. That also means it faces the same vulnerabilities as bitcoin, but without the protections that come from the large, dispersed group of people and organizations whose computers are powering the bitcoin blockchain. In recent days the nightmare scenario for any cryptocurrency is playing out for Bitcoin Gold, as an attacker has taken control of its blockchain and proceeded to defraud cryptocurrency exchanges. All the Bitcoin Gold in circulation is valued at $786 million, according to data provider Coinmarketcap . Blockchains are designed to be decentralized but when an individual or group acting in concert controls the majority of a blockchains processing power, they can tamper with transactions and pave the way for fraud. This is known as a 51% attack. The possibility of a 51% attack has been one of the concerns institutions such as banks and tech companies have had over the years about using the blockchain for transactions; some have worried that the Chinese government could at some point endeavor to do that, ordering all of the Chinese bitcoin miners to act in concert. Its unlikely for bitcoin, but for smaller cryptocurrencies, 51% attacks are a concern, one dramatized on a recent episode of HBOs series Silicon Valley. Cryptocurrency miners commit their computer processing poweror hash powerto adding new transactions to a coins blockchain. They are rewarded in units of the coin in return. The idea is that these incentives create competition among miners to add more hash power to the chain. The Continue reading >>

An Introduction To Understanding Attacks And Dishonesty On Proof-of-work Blockchains

An Introduction To Understanding Attacks And Dishonesty On Proof-of-work Blockchains

Scientist and Risk Taker math, informatics and their applications, in particular ML and blockchain aspiring renaissance man and polymath An introduction to understanding attacks and dishonesty on proof-of-work blockchains Any computer network can be attacked and blockchains running on distributed networks are no different. But the types of attacks blockchains are vulnerable to are somewhat different: in most cases, attackers must focus on manipulating the consensus process in order to hack or alter any information on a blockchain, rather than compromising anything like a password or firewall. In the following, I will explain the structure that hackers manipulate when trying to attack a blockchain secured by a proof-of-work consensus algorithm and will go over the most common types of attack: the 51% attack and double spending. This will prepare us to take a closer look at some research by Arthur Gervais who looks for an answer to the question: How should a rational attacker behave and allocate his resources to maximize profit?. To understand how an attacker can approach proof-of-work based networks, we will first revisit how the integrity of data is established across a distributed network (using a system called a consensus algorithm, see my older article on consensus systems for different approaches): Although many individuals participate in running the distributed network, only one individual may add any one new piece of data to the blockchain (i.e. make a new entry into the database) at a time. Its important to distinguish between participants who run the network (often called miners) and the users of the network, e.g. people receiving and sending Bitcoins (or more generally, the people who want to read and store some data on the blockchain). To get a new piece of d Continue reading >>

A 51% Attack On Bitcoin Means Mutually Assured Destruction

A 51% Attack On Bitcoin Means Mutually Assured Destruction

A 51% Attack on Bitcoin Means Mutually Assured Destruction What would happen if bitcoin were to suffer a 51% attack? Its a hypothetical question, but one that has troubled some of the communitys brightest minds. Just as army generals play out countless war games, enacting doomsday scenarios, bitcoin defenders like to ponder ways in which the decentralized cryptocurrency could be attacked and brought to its knees. Also read: Taking the New On-Chain BCH-Powered Social App Blockpress for a Test Flight Contingency Planning for a Worst Case Scenario A 51% attack, also known as a majority attack, refers to a situation in which a single miner or group of miners control the majority of the network hashrate. If attained, this would enable a bad actor to censor and reverse transactions, allowing them to double spend coins. One of bitcoins greatest attributes is its immunity to attacks, be they governmental or technological. With over 31 exahash now concentrated on the bitcoin network, launching a 51% attack would be virtually impossible. And yet the very act of contemplating such an event is critical in mitigating the likelihood of it ever occurring. Bitcoin war games arent just larping: theyre strategic defense. In a widely read article last month, Jimmy Song pondered various hostile mining scenarios, including those presented by chip manufacturers, ASIC manufacturers, and mining pools. He ran through the ways in which a 51% attack could play out, but observed that owning 51% of the harshrate may not be enough to take over the bitcoin network. According to Song, an attacker armed with 60% of the hashrate would still be expected to take 100 minutes to overtake the rest of the network in confirming blocks. Meanwhile, the rest of the network would have caught on to what was happen Continue reading >>

Could A 51% Attack On Bitcoin Cost Just $20m Dollars?

Could A 51% Attack On Bitcoin Cost Just $20m Dollars?

Could a 51% Attack on Bitcoin cost Just $20M Dollars? Written by Luka Glogoski on February 8, 2018 A 51% attack on the Bitcoin network is a theoretical possibility if a single malicious actor obtained the majority of the hashing power of the network. This would give them the ability to mine new blocks faster that all other miners combined. The network always accepts the chain with the most work completed (i.e. the longest). Hence, it would accept this new chain as the valid one. In the early days of it would have been relatively easy to pull off this attack on Bitcoin, but no-one bothered. However, now Bitcoin is all grown up and it could potentially pose a threat to the establishments financial system. A nation state or a large bank might begin to consider investing in such an attack to discredit and devalue Bitcoin. The question then becomes how much would it cost and what would its chances of success be? In the video below, the author seems to suggest that as little at $20million would have been enough at that time. Instead of closer to $1billion as suggested by most other people. Its a very interesting video and well worth the time watching. It covers many different aspects of such an attack. But even if such an attack was theoretically possible What would its chances be of successfully bringing down the Bitcoin network? In the video below, Andreas Antonopoulos, a world renowned Bitcoin expert, gives his opinion on the subject. Essentially what he says is that after the attacker would have covertly spent billions of dollars to establish a 10 minute long dominance over the network, they would quickly get discovered (since the blockchain is being carefully watched). The honest miners would simply reject any future blocks from them, isolating them from the network and Continue reading >>

What Is 51% Attack In Bitcoin? Can Crypto Mining Pools Invade A Majority Attack On Bitcoin?

What Is 51% Attack In Bitcoin? Can Crypto Mining Pools Invade A Majority Attack On Bitcoin?

What Is 51% Attack In Bitcoin? Can Crypto Mining Pools Invade A Majority Attack On Bitcoin? As the cryptocurrency mining is becoming less profitable for the small miners with rising electricity costs and a shrunken market due to big commercial miners pool, these pools pose a risk of a 51% attack to the cryptocurrency. A 51 percent or majority attack is an attack on the network that requires an extremely high amount of hash rate. This kind of attack can also happen while someone is waiting for his confirmation. By acquiring the majority of the hash rate of the network, one can revise the transaction history and prevent the confirmation of new transactions as well. Bitcoin miners basically utilize powerful computers in order to verify the transactions. Usually, there are mining pools which have groups of miners to combine their mining power and be more efficient. However, if someone gets more than 50 percent of networks mining power, they can use it to manipulate the system as per their personal needs. Bitcoin mining: Small independent miners & large commercial miners In most of the American states, it costs more than $3,000 to mine a single bitcoin. For profitability, miners need to purchase powerful hardware chips but the powerful a computer is, the more electricity it would consume and the more it will cost. For a small scale crypto miner , electricity cost is a significant concern. Earlier in the days, when the hash difficulty of the bitcoin mining increased to great levels resulting in decreasing the profitability, smaller crypto miners came together to combine their computing resources that resulted in the formation of mining pools. It wasnt long before these mining pools started dominating the crypto mining space. Furthermore, companies started manufacturing the c Continue reading >>

Majority Attack - Bitcoin Wiki

Majority Attack - Bitcoin Wiki

A majority attack (usually labeled 51% attack or >50% attack) is an attack on the network. This attack has a chance to work even if the merchant waits for some confirmations, but requires extremely high relative hashrate. The attacker submits to the merchant/network a transaction which pays the merchant, while privately mining a blockchain fork in which a double-spending transaction is included instead. After waiting for n confirmations, the merchant sends the product. If the attacker happened to find more than n blocks at this point, he releases his fork and regains his coins; otherwise, he can try to continue extending his fork with the hope of being able to catch up with the network. If he never manages to do this, the attack fails and the payment to the merchant will go through. The work done mining will also go to waste, as any new bitcoins would be overwritten by the longest chain. The probability of success is a function of the attacker's hashrate (as a proportion of the total network hashrate) and the number of confirmations the merchant waits for. For example, if the attacker controls 10% of the network hashrate but the merchant waits for 6 confirmations, the success probability is on the order of 0.1%. If the attacker controls more than half of the network hashrate, this has a probability of 100% to succeed. Since the attacker can generate blocks faster than the rest of the network, he can simply persevere with his private fork until it becomes longer than the branch built by the honest network, from whatever disadvantage. No amount of confirmations can prevent this attack; however, waiting for confirmations does increase the aggregate resource cost of performing the attack, which could make it unprofitable or delay it long enough for the circumstances to cha Continue reading >>

51% Attack | Investopedia

51% Attack | Investopedia

51% attack refers to an attack on a blockchain usually bitcoin's , for whichsuch an attack is still hypothetical by a group of miners controlling more than 50% of the network's mining hashrate, or computing power. The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users. They would also be able to reverse transactions that were completed while they were in control of the network, meaning they could double-spend coins. They would almost certainly not be able to create a create new coins or alter old blocks, so a 51% attack would probably not destroy bitcoin or another blockchain-based currency outright, even if it proved highly damaging. Bitcoin and other cryptocurrencies are based on blockchains, otherwise referred to as distributed ledgers. These digital files record every transaction made on a cryptocurrency's network and are available to all users for review, meaning that no one can spend a coin twice the digital equivalent of a perfect counterfeit, this ability would quickly destroy faith in the coin's value. As its name implies, a blockchain is a chain of blocks, bundles of data that record all completed transactions during a given period of time (for bitcoin, a new block is generated approximately every ten minutes). Once a block is finalized or "mined," in the jargon it cannot be altered, since a fraudulent version of the public ledger would quickly be spotted and rejected by the network's users. However, by controlling the majority of the computing power on the network, an attacker or group of attackers can interfere with the process of recording new blocks. They can prevent other miners from completing blocks, theoretically allowing them to monopolize the mining of new blocks a Continue reading >>

Can Crypto Mining Pools Invade A Majority Attack On Bitcoin?

Can Crypto Mining Pools Invade A Majority Attack On Bitcoin?

Can Crypto Mining Pools Invade A Majority Attack On Bitcoin? Bitcoin miners basically utilize powerful computers in order to verify the transactions. Usually, there are mining pools which have groups of miners to combine their mining power and be more efficient. However, if someone gets more than 50 percent of networks mining power, they can use it to manipulate the system as per their personal needs. Quote from: Divinityxd on April 16, 2018, 05:38:33 PM Bitcoin miners basically utilize powerful computers in order to verify the transactions. Usually, there are mining pools which have groups of miners to combine their mining power and be more efficient. However, if someone gets more than 50 percent of networks mining power, they can use it to manipulate the system as per their personal needs. Continue Reading: as far as i know yes.. thats make it more centralized right? but some other project counter this with different methods.. Ghash.io was the biggest pool in 2014. It crossed the 50% threshold in July and that created quite a controversy. As a result of the controversy, ghash.io pledged to remain below 40%, but by then it was too late. Many members of the pool left and joined smaller pools. The loss of members continued until October 2016, when the pool was closed. The lesson for mining pools is this: if you get close to 51%, your members will leave. More info on ghash.io: Buy bitcoins with cash from somebody near you: LocalBitcoins Buy stuff on Amazon at a discount with bitcoins: Purse.io It is true that if we want to mine we must use a computer that is really strong so we can get maximum results. Pre-ICO Start - 27.04.2018 The Ghash situation shows exactly the strength and vision of the Bitcoin community. Instead of using the majority hash to mess with the system t Continue reading >>

Majority Attack - Bitcoin Wiki

Majority Attack - Bitcoin Wiki

A majority attack (usually labeled 51% attack or >50% attack) is an attack on the network. This attack has a chance to work even if the merchant waits for some confirmations, but requires extremely high relative hashrate. The attacker submits to the merchant/network a transaction which pays the merchant, while privately mining a blockchain fork in which a double-spending transaction is included instead. After waiting for n confirmations, the merchant sends the product. If the attacker happened to find more than n blocks at this point, he releases his fork and regains his coins; otherwise, he can try to continue extending his fork with the hope of being able to catch up with the network. If he never manages to do this, the attack fails and the payment to the merchant will go through. The work done mining will also go to waste, as any new bitcoins would be overwritten by the longest chain. The probability of success is a function of the attacker's hashrate (as a proportion of the total network hashrate) and the number of confirmations the merchant waits for. For example, if the attacker controls 10% of the network hashrate but the merchant waits for 6 confirmations, the success probability is on the order of 0.1%. If the attacker controls more than half of the network hashrate, this has a probability of 100% to succeed. Since the attacker can generate blocks faster than the rest of the network, he can simply persevere with his private fork until it becomes longer than the branch built by the honest network, from whatever disadvantage. No amount of confirmations can prevent this attack; however, waiting for confirmations does increase the aggregate resource cost of performing the attack, which could make it unprofitable or delay it long enough for the circumstances to cha Continue reading >>

Verge Is Forced To Fork After Suffering A 51% Attack

Verge Is Forced To Fork After Suffering A 51% Attack

Verge Is Forced to Fork After Suffering a 51% Attack Verge, a privacy coin famed for the zealotry of its community, has fallen prey to a 51% attack. A malevolent miner gained majority control of the network hashrate, a feat that makes it possible for the controlling entity to modify transactions, calling the integrity of the entire blockchain into question. Around 250,000 verge were stolen by the attacker, forcing the project team to prepare a hard fork. Also read: I dont want this says Mt Gox CEO Mark Karpeles in Surprise Ask-Me-Anything Accident-Prone Altcoin Has Another Bad Day On Wednesday April 4, ocminer, a regular poster on the Bitcointalk forum, announced that verge (XVG) was experiencing a 51% attack. A bug in the altcoins code enabled the attacker to spoof timestamps and cause each new block to be produced using the same algorithm. Usually, a different algorithm must be used for each block to prevent any single miner or pool of miners from controlling the XVG hashrate. The verge community arent known for their tolerance of negative stories, and soon theyd piled into the Bitcointalk thread to dismiss the fake news and FUD. One fanboy mused: The timing of this attack seems highly suspicious. Is it possible this was not an individual but an anti-crypto governmental organization that fears the huge deal that Verge is making? Way too much of a coincidence here. Ive said for months that all it takes is one huge (legit) deal with an Amazon/Paypal class company and the market will quadruple overnight. Using a number of exploits in the XVG code, the attacker was able to mine multiple blocks one second apart, all performed using the scrypt algorithm, a feat which ought to have been impossible. The attack relented after three hours, but by that time the attacker had con Continue reading >>

Twenty Percent And A Few Days Optimising A Bitcoin Majority Attack

Twenty Percent And A Few Days Optimising A Bitcoin Majority Attack

NFM 2018: NASA Formal Methods pp 157-163 | Cite as Twenty Percent and a Few Days Optimising a Bitcoin Majority Attack Part of the Lecture Notes in Computer Science book series (LNCS, volume 10811) Bitcoin is a distributed online payment system that organises transactions into blocks. The size of blocks is limited to 1 megabyte, which also limits the number of transactions per second that can be confirmed. This year several attempts have been made to create a fork or a split that removes this restriction. One such alternative is Bitcoin Unlimited (BTU). Proponents of BTU have suggested to use a type of majority attack to force other Bitcoin miners to adopt BTU. In this paper we model this attack in Uppaal, and analyse how long it will take for an attack to succeed, depending on the share the attacker has of the total network, and the so-called confirmation depth. The analysis shows that with a share of 20% an attack will be successful within a few days. This paper also looks at the effect of increasing the confirmation depth as a countermeasure. This is a preview of subscription content, log in to check access. Continue reading >>

Learn Cryptography - 51% Attack

Learn Cryptography - 51% Attack

A 51% attack is a potential attack on the bitcoin network whereby an organization is somehow able to control the majority of the network mining power (hashrate). Bitcoin is secured by having all miners (computers processing the networks transactions) agree on a shared ledger called the blockchain. Bitcoin nodes look to each other to verify what they're working on is the valid blockchain. If the majority of miners are controlled by a single entity, they would have the power to (at least attempt to) decide which transactions get approved or not. This would allow them to prevent other transactions, and allow their own coins to be spent multiple times - a process called double spending. However, hitting 51% network control is not a guarantee of success, just the point where success is likely. In fact, you could attempt this sort of attack with much less network control, but your odds of success would be very low. Additionally, a 51% attack doesn't give you full power over the bitcoin network. The farther back in the blockchain transactions are, the more secured they are against this kind of attack. Realistically, an attacker would only be able to modify transactions within the past few blocks. They would also not be able to make new coins out of thin air - except those received as block mining rewards as usual. It is an interesting concept because it is theoretically possible; the network is free and open, so if someone were to have enough computational power (which would cost a huge amount by itself), there is no bitcoin authority to stop them from doing so. In the event that such an attack successfully takes place, it is likely confidence in the currency would be lost and its value as a currency would decline rapidly. In reality a 51% attack is feasible especially with t Continue reading >>

Bitcoin More Vulnerable To Attack Than Expected

Bitcoin More Vulnerable To Attack Than Expected

Bitcoin more vulnerable to attack than expected April 23, 2018 by Joost Bruysters, University of Twente Calculations by University of Twente researchers show that Bitcoin is more vulnerable to attack than people had always assumed. If some Bitcoin users were to form a group that controls 20 percent of the currency's computing power, they could launch an attack and, within a few days, force all other users to accept a new standard for Bitcoin. The researchers presented their results last week, at a scientific conference organized by NASA in the United States. The Bitcoin network uses blockchain technology . All individual transactions (blocks) are linked to each other, forming a chain that any user can check. Within the Bitcoin network, agreements have been made about how exactly these transactions are linked together. The Bitcoin world is currently divided into various camps. One camp wants to maintain the current standard. Other camps advocate modifications to enable more transactions to be carried out in a shorter period of time, for example. The current protocol imposes a hard upper limit on the size of individual blocks, which means this global system can process no more than seven transactions per second. Many people feel this limitation makes the network far too slow. It certainly does not bear comparison with the number of transactions that credit card companies can process in a second. Changes to the Bitcoin protocol can only be implemented if they are accepted by the majority of users. However, calculations by University of Twente researchers show that provided it holds 20 percent of the 'mining power' a limited group could use an 'Andresen attack' to implement a new protocol within a few days, and force all other users to adopt it. Ansgar Fehnker, one of the Continue reading >>

One Bitcoin Group Now Controls 51% Of Total Mining Power, Threatening Entire Currencys Safety

One Bitcoin Group Now Controls 51% Of Total Mining Power, Threatening Entire Currencys Safety

One Bitcoin group now controls 51% of total mining power, threatening entire currencys safety One Bitcoin group now controls 51% of total mining power, threatening entire currencys safety By Joel Hruska on June 16, 2014 at 10:43 am This site may earn affiliate commissions from the links on this page. Terms of use . Ever since the alternative cryptocurrency Bitcoin launched, its had a known potential security flaw. If any single miner or collective group of miners (known as a pool) were ever able to account for 51% of the total hashing power on the network, those miners would be able to exert significant power over the entire blockchain. (See here for our intro primer to Bitcoin and an explanation for how the network functions ). In five years, thats never happened, because the BTC mining community has aggregated into a number of large players rather than a single network with disproportionate influence. Now, for the first time, thats changed Ghash.io passed the 51% mark for more than 12 hours this week, after promising to never do so back in January. This could be potentially devastating to the stability and reliability of the worlds most popular cryptocurrency. The record of all past Bitcoin transactions is known as the blockchain, but this information isnt stored in any central server. The blockchain is stored across multiple pools and continuously checked and rechecked. Periodically, a mining pool will mine a block that isnt part of the conventional blockchain this is known as an orphan block. When the orphaned block is validated against the pre-existing blockchain, it will be discovered and tossed out of the pool. The diagram below shows this process. In this graph, purple blocks are orphan blocks while the black blocks are the validated block chain. When two or mo Continue reading >>

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