51% Attack

A 51% attack (or majority attack) is a potential attack on a blockchain network where a single entity or group of entities gains control of 51% or more of the network's hash rate. This would allow the attacker to have control over the network and perform various malicious activities such as double-spending coins, reversing recent transactions, or preventing new transactions from being confirmed. The attacker essentially has the ability to rewrite portions of the blockchain, undermining the fundamental trust that makes decentralized networks valuable.

The feasibility of a 51% attack largely depends on the size and decentralization of the network. Larger networks like Bitcoin require enormous amounts of computing power and electricity to achieve majority control, making such an attack prohibitively expensive in practice. Smaller, less established cryptocurrencies with lower hash rates are far more vulnerable, and several altcoins have suffered successful 51% attacks throughout crypto history, resulting in significant financial losses for exchanges and users.

To protect against 51% attacks, blockchain networks rely on a combination of broad miner participation, economic incentives that make attacks more costly than they are profitable, and in some cases, additional consensus layer protections. Proof-of-stake networks replace hash rate with staked capital as the measure of consensus power, which changes the economics of a majority attack — an entity would need to acquire a majority of staked tokens, which would simultaneously destroy the value of their own holdings if the attack succeeded.