51% Attacks Force Blockchain Networks Into Decision Mode

Should 51% attacks be prevented, or should we let them run their course? The debate wages on.

By Alissa Fleck

The recent 51% attack on the Ethereum Classic blockchain has many crypto enthusiasts now seeing the writing on the wall for other PoW chains with few-to-no miners on them.

On January 5, Coinbase announced it had detected a deep chain reorganization with a double spend on the Ethereum Classic chain, triggering a pause in movement of ETC funds on its platform. Four days later, a Redditor raised the alarm in a crypto forum that a single miner now possesses more than 50% of all Dash blocks (the original post has since been removed).

Of course, 51% attacks are nothing new. Over the summer, Coindesk reported that five cryptocurrencies had been hit in a short span by this type of attack, and networks and industry leaders have been scrambling to find ways to avert them ever since. In fact, just a month ago, Dash proposed a protection mechanism — ChainLocks — which would make such attacks more difficult to carry out and less damaging if they were to occur.

It’s not that prior to 2018 no one believed the threat of such an attack was real. Rather, they couldn’t imagine such attacks being profitable for the attacker. Earlier this year, NYU researcher Joseph Bonneau published a paper responding to that argument, pointing out that hostile takeovers aren’t exclusively motivated by profit — sometimes they’re motivated simply by the desire to watch the world burn, so to speak. Bonneau even likened these hypothetical attackers to Bond villains.  

Indeed, such attacks wreak havoc beyond just monetary loss. They put a strain on legitimate network nodes and participants and, critically, they give blockchain critics more ammunition thanks to scare-mongering headlines that fail to acknowledge that, though undesirable, 51% attacks are neither new nor novel.

Dash is now in the process of implementing ChainLocks, but it may be too late. According to CCN, as of a January 9 publication, one entity controlled three addresses with a combined 26,665 Dash, or about $2.2 million.

As with all things crypto, the issue of 51% attacks is not cut-and-dry. Some key figures believe networks should be vulnerable to 51% attacks. This, they say, is the only way to remain truly decentralized. For example, Litecoin creator Charlie Lee argued that any network immune to a 51% attack would have to be considered centralized, and that all PoW chains, Bitcoin included, should be susceptible (a sentiment echoed by many major figures).

This schism is what led to the creation of Ethereum Classic in the first place.

After ZenCash was hit with a 51% attack earlier this year, it floated a three-pronged approach to the problem. The company’s position was that playing by the rules of Satoshi’s Consensus — that the longest chain becomes the new chain — worked back in 2009, but times have changed and the consensus must evolve as well.

ZenCash’s proposal includes:

  1. Require block hash pointers to n >1 blocks whenever there are parallel blocks reported on the network
  2. Introduce a penalty metric for delayed block reporting (with a complementary option to dynamically adjust difficulty based on the penalty metric)
  3. To use [the Zencash] node system as a sort of notarization service that effectively layers proof-of-stake on top of the current proof-of-work.

Naturally, this series of attacks brings the debate back around to PoW vs. PoS. ZenCash told the public it would be “irresponsible not to consider PoS” following its 51%. But, as Bonneau noted in his research, PoS systems are also vulnerable in their own way — particularly to race-to-the-door attacks.

Whether other networks will adopt similar protections remains to be seen. An open source project called Crypto51 recently published a list of all coins and their susceptibility to an attack. Specifically, they catalog the likelihood that any particular coin can be “Nicehashed.” At press time, Bitcoin carries a 0% risk. One of the most vulnerable? Catcoin, at 843,684%.

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