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Suppose organization X has 51% of the hash power for a period of 1 week. In this week, what exactly can and can't X do?

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Note that there may be some attacks, such as selfish mining, which require < 51%. –  Chuck Batson Dec 16 at 19:59

5 Answers 5

up vote 46 down vote accepted

Actually, it's very easy to do damage to the network once you have 51%; just build your own chain faster than the network, and broadcast it whenever you like. If you send some of your coins to a new address in your own chain, all the transactions issued in the live network by spending those same coins will be reversed at the moment the longer chain is broadcast.

Right from the bitcoin wiki (probably proof-read by many pairs of eyes) :

An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:

  • Reverse transactions that he sends while he's in control
  • Prevent some or all transactions from gaining any confirmations
  • Prevent some or all other generators from getting any generations

The attacker can't:

  • Reverse other people's transactions
  • Prevent transactions from being sent at all (they'll show as 0/unconfirmed)
  • Change the number of coins generated per block
  • Create coins out of thin air
  • Send coins that never belonged to him

It's much more difficult to change historical blocks, and it becomes exponentially more difficult the further back you go. As above, changing historical blocks only allows you to exclude and change the ordering of transactions. It's impossible to change blocks created before the last checkpoint.

Since this attack doesn't permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always gain more by just following the rules, and even someone trying to destroy the system will probably find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or impossible to "untangle" the mess created — any changes the attacker makes might become permanent.

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from the documentation: The client accepts the 'longest' chain of blocks as valid. The 'length' of the entire block chain refers to the chain with the most combined difficulty, not the one with the most blocks. This prevents someone from forking the chain and creating a large number of low-difficulty blocks, and having it accepted by the network as 'longest'. –  Elijah Saounkine Nov 12 '13 at 7:30
    
Yes sure. Longer is meant in terms of proof-of-work. –  Stéphane Gimenez Nov 12 '13 at 8:59

In theory, this attacker owns enough computing power that they could execute a "double spend" attack. They could spend coins in one place, allow the coins to enter the block chain as normal until the required confirmations are met, then fire up their 51% of the miners to craft a fraudulent fork of the block chain in which those coins were never spent, allowing them to re-spend the coins. This could theoretically be repeated for as long as the attacker maintained control of 51% or more of the hashrate.

Realistically, 51% is only the point at which this becomes possible not the point at which it becomes likely or easy. An attacker would probably need something like 65% to actually execute such an attack.

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Could you clarify if that 65% figure is a made up number of based on something? I'm guessing there might be some curve that could plot the liklihood of succeeding vs. the percentage of the hashing power owned, but I don't know the details well enough to be sure... –  Michael McGowan Sep 6 '11 at 18:24
    
Will waiting for more confirmations decrease the chance of a successful double spend if an attacker consistently has 51% for a week? –  ripper234 Sep 6 '11 at 18:25
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The 65% is a made up number, little more than a semi-educated guess. If anyone has actual math to share I'd be happy to modify my answer to include it. As for waiting on confirmations, it will help but only so much. 51% or higher bestows some chance of forging a block on the attacker. If the attacker had 100% for a week they could undo a week's worth of blocks in that time. 51% would probably only let a thief undo a small handful of blocks if that much - again if anyone has the math to back this up, please post it. –  David Perry Sep 6 '11 at 18:38
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51% would allow an attacker to undo as many blocks as they wanted and undo a transaction no matter how many confirmations it has. They simply commit the transaction they wish to undo into the public block chain and a conflicting transaction into their private block chain. They then wait until as many confirmations as needed. They then wait until their private block chain is longer than the public blockchain, which it will eventually be with higher and higher probability. As soon as their chain is longer, they announce it, and their chain wins. –  David Schwartz Sep 6 '11 at 21:29

And then there is the denial of service possibility of suddenly withdrawing from the service, taking the necessary computing resources away to continue to solve blocks every ten minutes until the difficulty is adjusted down again (which could take a long time if there is only a block every day for example).

Of course, for that one would need much more than 51% of hash power.

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if hashes are created every 10 minutes, and 51% leaves the network then hashes are created about every 20.4 minutes, so this answer is wrong (or assumes a lot more than 51% and thus doesn't answer the question) –  Artem Kaznatcheev Sep 8 '11 at 2:49
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@Artem: Yes, I was trying to convey that in the last sentence. Sorry if that was unclear. I'll move the answer over to the question "What can an attacker with 95% of hash power do?" once it is asked ;-) –  Thilo Sep 8 '11 at 2:55

Anyone who owns 51% of the network will have made a massive investment in hardware and systems to organize and construct a machine capable of executing such an attack. If their motive is profit, then the short term gain associated with forking the block chain to enable 'double spend' will net them a negligible benefit; it's difficult to imagine they would pursue this strategy on the basis that the resulting instability will ultimately de-value the very coins they seek to 'spend twice'. If their motive is to destroy Bitcoin, period, that is another matter altogether. That kind of techno-vandalism could only reasonably be motivated by someone with destruction and disruption serving as their primary motivation.

Instead, I posit it's much more likely that such a massive and powerful compute resource (Bitcoin supercomputer) will be used to power the vast bulk of the network within the bounds of its intended use, profiting long term from generation rewards and transaction fees, as the network grows and prospers over time.

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"will have made a massive investment in hardware and systems": based on this and following, you kind of imply that attacker would need to put massive amounts of, ahem, real-world money and resources into that. That doesn't have to be true: 1) attacker can use inflated value of pre-mined virtual currency; 2) fraudulent technical engineering (e.g. automatically built botnet); 3) social engineering, like inviting minority users to participate in "mining pools", essentially incentivizing users to willingly be put in adhoc botnets orchestrated by pool owner(s). –  pfalcon Dec 7 '13 at 5:44

I suspect he might be able to mine more than 51% of the blocks. See Can someone with 51% computing power earn more than he deserves?

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