The 51% Attack on Blockchains: A Mining Behavior Study

Abstract

The applications that use blockchain are cryptocurrencies, decentralized finance applications, video games and many others. Most of these applications trust that the blockchain will prevent issues like fraud, thanks to the built-in cryptographic mechanisms provided by the data structure and the consensus protocol. However, blockchains suffers from what is called a 51% attack or majority attack, which is considered a high risk for the integrity of these blockchains, where if a miner, or a group of them, has more than half the computing capability of the network, it can rewrite the blockchain. Even though this attack is possible in theory, it is regarded as hard-achievable in practice, due to the assumption that, with enough active members, it is very complicated to have that much computing power; however, this assumption has not been studied with enough detail. In this work, a detailed characterization of the miners in the Bitcoin and Crypto Ethereum blockchains is presented, with the aim of proving the computing distribution assumption and to creating profiles that may allow the detection of anomalous behaviors and prevent 51% attacks. The results of the analysis show that, in the last years, there has been an increasing concentration of hash rate power in a very small set of miners, which generates a real risk for current blockchains. Also, that there is a pattern in mining among the main miners, which makes it possible to identify out-of-normal behavior.

On Proof-of-Accuracy Consensus Protocols

“…However, having a coordinator still presents a unique point of failure for this approach; Also, it solely relies on the proof of work (which may not have a solution) performed by a mining party at step 6. To reduce power concentration (hence, the 51% attack [5]) and increase the fairness of the mining process, a new version should complement the proof of work with other approaches, for example, access to random locations (similar to PoC) [17].…”

“…A blockchain network performs the secure administration of the shared ledger, where transactions are verified and stored in a network without a central authority [4]. Applications that use blockchain, such as cryptocurrencies, decentralized finance applications, video games, and many others, trust that blockchain will prevent problems such as fraud, thanks to the integrated cryptographic mechanisms provided by the data structure and the consensus protocol [5].…”

“…Its study covered 96 papers categorized into 7 application domains: finance (e.g., [7]), achievement records (e.g., [8]), energy (e.g., [9]), healthcare (e.g., [10]), manufacturing (e.g., [11]), supply chain (e.g., [11]), shipping and delivery (e.g., [12]), and sustainability (e.g., [13]). Regarding security challenges, they highlighted majority attacks [5], DDoS attacks, selfish mining, and others [6]. Concerning performance challenges, they focused on throughput and latency in some blockchains, as well as resource and energy management issues [6].…”

The security of the Coordicide: the implementation and analysis of possible attack vectors

“…In [53,52] the problem of centralization of PoW system is raised, where mining pools (groups of miners that combine their hashing power and split the reward proportionally) are in the possession of a large amount of hashing power in the network. E.g., in Bitcoin seven out of the ten biggest mining pools are based in China.…”

A Blockchain-Based Decentralized Marketplace for Trustworthy Trade in Developing Countries

“…Furthermore, if the Ethereum public network was to be used instead, it should be taken into consideration that the deployed Smart Contract not only makes use of cryptographical libraries (as explained in the following point) but also would make use of a distributed system (the Ethereum network itself) that currently uses PoW as the consensus algorithm, which adds up to the proposed system characteristics. Indeed, performing a 51% attack [41] would demand that the attacker has more computational power than most of the validating nodes of the attacked blockchain. As it was explained before, this becomes quickly unfeasible if a certain number of users is reached.…”