The possibility of a 51% attack has become a frightening reality with the profitability of such attacks attracting criminals, these events have occurred more frequently than ever predicted. Including Verge and Bitcoin Gold, big names have fallen prey to multi million dollar thefts.
The Basics :
To double spend, a criminal simply needs to accumulate 51% of the network hash rate. The hash rate is simply a measure of speed given to equipment as its used for mining activity. Next the criminal can attempt to double spend a transactions, Initially sending X amount to one exchange and cashing out, the same amount can then be sent to another platform and cashed out again. Due to the mining power under the criminals control he can get the same transaction confirmed in both instances, but when the recipient of the first transaction attempts to use the funds he wont be able to.
Miner rental services
Miner rental platforms such as NiceHash and MiningRigRentals have become extremely popular in recent times as many look to mine crypto coins without the hassle of purchasing expensive equipment. Especially concerning smaller blockchains which often have less than 20TH/s of network hashrate, criminals can easily buy up equipment to control 21TH/s of equipment and double spend large transactions.
“Bitcoin is too big and there isn’t enough spare bitcoin mining capacity sitting around to pull off the attack, “Joseph Bonneau – NYU computer science researcher
To conclude, 51% attacks remain a frightening possibility even for the biggest of coins. While no coin remains immune from this possibility, larger chains do have the increased protection of larger hash rates. Despite smaller coins such as Zencash and Monacoin prey to these attacks there are few solutions to the threat. Increasing the required number of confirmations on each transactions remains a extremely effective stop gap till a permanent solution is developed. Furthermore simply placing savings and long term investments into bigger coins will also help prevent your assets from vanishing overnight in the midst of a 51% attack.