51% Attack
A 51% attack is a type of attack that occurs when an attacker or group of attackers gains control of the majority (at least 51%) of the computing power, or hashrate, involved in mining a cryptocurrency. This allows them to reverse transactions on the blockchain and double-spend coins.
In order to execute such an attack, it requires significant resources and money since miners must be paid for their efforts as well as access to enough hardware to achieve 51%. As such, this type of attack is only possible if there are few miners controlling most of the network hashrate.
The likelihood and potential damage from a 51% attack is determined by several factors: coin market capitalization; total number of active miners; concentration level among top miners; hashing algorithm used by the coin’s blockchain protocol; and transaction frequency per hour. A higher market cap means more money invested into securing the network leading to decreased chances for success in any malicious attempt against it. Furthermore, having many active miners will make it more difficult for an attacker(s) to take over 50%-plus-one computing power share needed for successful execution. The same effect can be achieved with fewer but highly concentrated miner pools compared to distributed ones throughout different parts of world regions. Additionally, certain types hashing algorithms like SHA256 are considered less secure than others like Ethash due its susceptibility towards centralization while increased transaction volumes increase security risk associated with double spending attacks due additional blockchains reorganizations required by attackers before they can succeed with their mission.
In order prevent these kinds attacks there are numerous methods which range from using specialized software solutions (like ChainSecurity) which detect irregular behaviors within networks up all way up until changing entire consensus protocol in use including PoW/PoS hybrids or completely leaving PoW behind altogether (in case Ethereum).
