by Rushali 
So, you must have heard and read everywhere about the epitome of security that bitcoin and other cryptocurrency provides but, is it really that secure?
Are you putting your hard-earned money in the right place or in the right instrument?
Not only bitcoin but other altcoins…are those safe? what is a hack that you hear about from time to time, there are influencers and huge personalities who lost almost all of their bitcoins and cryptocurrency investments due to a hack in the network.
Well, those are not the hacks we will be talking about today…the hacks you hear about are simple exchange hacks or wallet hacks and sometimes accidental deletion too, Although I would not consider that as a hack.
An exchange hack is if the security of the particular exchange gets compromised and all of the user’s data gets vulnerable. This is also called a hot wallet crypto hack in which the “hot wallet” is the exchange wallet in which you keep your assets stored. For example Binance, WazirX, etc.
The wallet hacks are those in which a particular wallet gets hacked and some specific users are targeted in the form of phishing and getting access to the private keys of the user’s crypto wallet.
Also Read :
Accidental deletion can happen if you are using a paper wallet or a hardware wallet and accidentally lose the paper which contains your public and private keys and also if you somehow misplace the hardware wallet…these are not common.
Today we will take a look at the 51% attack or the monopoly attack in which the consequences are not against a specific user but, the whole network.
Although m, it is a theoretical attack and the probability of happening practically is nearly impossible but, it is one of how a cryptocurrency network can be destroyed.
So, What is a 51% attack?
To understand this one must know all the basics of blockchain technology, how bitcoins work? How do cryptocurrencies work?
If you are not aware of the basics then I would recommend that you read the other articles before and then get back to this article. So, a 51% attack or the monopoly attack is something when a single person or a group of people gets 51% of the hashing power out of the 100% available worldwide. What this means is when everybody competes in the proof of work structure to write the next block in the blockchain, the one with a 51% hash rate will always win making the competition and the proof of work system obsolete creating a monopoly in mining.
He or they will be able to write their own private blockchain leading to consequences like
Double Spending- they will double-spend their bitcoins using the same bitcoins for multiple transactions by not including the transactions in the private blockchain.
Censoring of addresses- they will be able to censor certain addresses of wallets like not including the transaction from a particular wallet address to another particular wallet address.
Hijacking the reward system- when they will always be the only one winning the proof of work structure, only they will collect the transaction rewards.
This will lead to further majority attacks as without any rewards the other crypto miners will go out of business making them eventually the 100% owner of the hashing power mining their own private blockchains as per their needs.
This is not theoretically possible as achieving 51% of the worldwide hashing power is not monetarily feasible because it will cost billions of dollars to achieve such mining capacity to outperform everyone on this planet and also at the end the monetary reward will be zero because nobody will be accepting the mines cryptocurrency plummeting its value more than ever.
Although, if someone has only the intention of destroying the cryptocurrency network on a whole without any monetary benefit in mind like if the government of any country or several countries combined wants to do such kind of a thing like destroying the cryptocurrency and blockchain at a whole then they might try.
The things that need to be noted are, this attack is not like a videogame cheat code so, one cannot create bitcoins out of thin air, one cannot steal others’ coins, and also one cannot change the underlying set of rules like the reward system etcetera.
One also cannot reverse anyone else’s transaction.
Although, these scenarios would not come as the whole network will crash in a matter of time.
This was a simplified explanation of the 51% attack or the monopoly attack and further research can get you much more and better insights on this particular topic of interest.
I would like to once again clarify although this attack is nearly impossible practically, on paper, it is a possible thing.
