The 51% attacks have become more prominent than ever and are more likely to take place when the blockchain network is small. Few sources revealed that there is a chance for Bitcoin’s network security to fail and Bitcoins to if the coins do not double.
The reason behind the same is claimed to be the Bitcoin halving because it causes the miner’s rewards to halve, and with time, it can fall off completely due to the limited supply of Bitcoin in the world.
Also, when the mining rewards decrease, the blockchain network becomes more susceptible to such attacks. Bitcoin, being a strong and large network, is less likely to be attacked by 51% attack.
However, there are a few altcoins that have a history and are susceptible to 51% attack. Let’s get into the details to examine how Bitcoin is free from 51% attack and how it has affected a few altcoins(with a historical background check).
Bitcoin’s security is probable depending upon the number of confirmed transactions. Not just 51% attacks but other attacks are also because it costs too much to reverse the blocks due to the large network of Bitcoin.
Even if the attackers reverse a few blocks, after a certain period, it will become financially difficult to change the Bitcoin blocks.
However, if the block rewards are less, resulting in less participation, it becomes easy to execute a 51% attack.
Also, when Bitcoin was released, a checkpoint appeared after every 500 blocks. A checkpoint is a potential way to safeguard the network as it is a hash value that consists of data from previous blocks and current blocks.
Bitcoin employs the checkpoint feature, which is why it is impossible to make any changes to the network after every 500 blocks. The alterations can be made before the said checkpoint but not after that.
This checkpoint feature is employed in the modern block confirmation model(such as Proof-of-stake), which is said to be used instead of Proof-of-work for safe exchanges and networks.
BSV and BCH have a history that gives convincing evidence of their encounter with the 51% attack. Even though Bitcoin, BSV, and BCH have the same mining algorithm(i.e., SHA-256), they have significantly lower prices than Bitcoin. Due to this, mining enthusiasts are observed to operate these two networks with reduced block rewards.
Less than one percent of BTC’s hash rate goes to BCH, while about one-thousandth of BTC’s goes to BSV.
After going through several halving cycles, BCH is a replica of BTC, with block rewards currently only accounting for 1% of the total, or 0.0625 BTC, following six halving cycles.
BSV has encountered a 51% attack even after 500 blocks due to the small networking size. BCH, however, maintains some security, proving the stability of the Bitcoin system. Even the potential damage caused to the altcoins network has two aspects:
The 51% attack does not lead to the theft of coins or cannot fabricate fake coins. It only delays the transaction’s confirmation time; once the 51% attack ends, the transactions are confirmed.
BSV has survived multiple 51% attack cycles without any incidents of miners robbing users’ funds or producing fake BSV coins.
Bitcoin was created to avoid the problem of double-spending; there, attackers deposit a sum of BTC into an exchange and promptly convert it into another cryptocurrency after the deposit is verified after a few transactions.
After that, the attacker starts a 51% attack from the block before their deposit, mining a number of subsequent blocks.
Due to the longer chain being produced than the prior chain of six blocks, which contains the attacker’s transaction rather than the original deposit, miners are forced to use the longer chain.
The attacker’s initial deposit is lost, and the exchange loses the coin generated from the BTC. This double-spending attack is made against the exchange, and it leads to legal consequences.
Any blockchain can be the target of a 51% attack, but smaller blockchains with lower hash rates make it especially simple to carry them out.
BSV and BCH are a few altcoins that share the same algorithm(SHA-256) as that of Bitcoin yet still are more susceptible to 51% attack than Bitcoin. BSV is also considered a safe network; however, BCH is mostly in danger due to its small network size.
Additionally, Bitcoin, being one of the last mined crypto networks, is less likely to get affected by the 51% attack.
Altcoins like Bitcoin SV(BSV) and Bitcoin Cash(BCH) are more at risk of being affected by 51% Attacks.
The checkpoint appears after every 500 blocks and raises the security bars of the Bitcoin network.