Why Bitcoin Experts Aren’t Afraid of a 51% Attack

Much of the Bitcoin community was in a frenzy last weekend as mining pool GHash.io came close to reaching 50% of all hashing power on the network. If any one entity gains 51% of the Bitcoin network’s power, it would enable them to double-spend transactions and even shut down the entire system — if only for an hour or two.

Right now there’s no evidence that GHash.io would actually execute such a malicious attack, especially since it would hurt their core business. But that hasn’t stopped some in the community from imagining a hypothetical situation in which a powerful government or corporation coerces the GHash.io operators into allowing an attack to happen.

Such a scenario has been touted as one of Bitcoin’s few weaknesses, although it’s unclear exactly how damaging a 51% attack would be. Many in the community fear that it would effectively kill the digital currency, while others worry that it will simply erode public trust in Bitcoin and send the price plummeting. Either scenario is bad for enthusiasts, and that’s why the Bitcoin subreddit was hysterical as GHash.io hovered around 47% hashing power.

Mining pool hashrates

At the time of this writing, GHash.io had 45% of all hashing power in the last 24 hours.

But how much of a risk is a 51% attack, really? It’s never happened before, and it goes against the incentives of the miners themselves. If GHash.io did attempt such an attack, it would be effectively killing its own business that revolves around Bitcoin mining. A shadowy government coming in and coercing the owners is also unlikely, and would probably not happen without significant resistance.

Still, the risk may be slight, but it is also real. Having 51% of all mining power means having inordinate control and influence over the blockchain — a problem that Satoshi could not have foreseen, without anticipating the rise of ASICs and huge mining pools. But instead of having a knee-jerk reaction of vitriol against GHash.io and its users, the Bitcoin community should take a measured approach to solving this problem.

Expert’s Opinion on a 51% Bitcoin Mining Pool

Because Bitcoin is five years old, there are prominent developers and enthusiasts who have been aware of the 51% issue for a very long time. Gavin Andresen — chief scientist at the Bitcoin Foundation and former lead developer of the core Bitcoin code — wrote back in 2012 that miners on the network would “quickly figure out a rule or rules to reject” a 51% attack.

According to Andresen, a simple line of code could be added to Bitcoin that would stop a 51% attack in its tracks:

Ignore a longer chain orphaning the current best chain if the sum(priorities of transactions included in new chain) is much less than sum(priorities of transactions in the part of the current best chain that would be orphaned)

This would require the 51% attacker to not only have a majority of mining power, but also a majority of high-priority transactions happening on the network. Such transactions can be faked by the attacker, but only for a limited time. Andresen’s hypothetical code would serve to reject the fraudulent blockchain being built by the attacker, and return the Bitcoin network to working order within a couple hours.

However, changing the rules for how the correct blockchain is chosen can have its own repercussions. Andresen expands on this point in his blog:

The devil is in the details, of course, and the risk of introducing a new chain-acceptance rule (high) have to be weighed against the chances that somebody rich and irrational will try to pull off the attack (low, in my opinion, but maybe I’m not sufficiently paranoid about Big Banks or Big Government using Dirty Tricks to shut down Bitcoin). Maybe I’ll code it up and keep it as a ‘Not To Be Used Except In Case of Emergency’ branch.

It would be interesting to know whether Andresen still has that code lying around somewhere, and whether he thinks it might be useful in the future if GHash.io exceeds 50% hashrate. In any case, it’s clear that he doesn’t consider the 51% attack a real threat to Bitcoin, and it can easily be combated by a simple change to the code.

“Big Whoop”

Another prominent Bitcoiner who isn’t afraid of a 51% attack is Andreas Antonopoulos — distributed systems expert and founder of RootEleven, a technology incubator that focuses on cryptocurrencies. Back in January of this year, Antonopoulos was at a Bitcoin meetup in Los Angeles when someone asked him about the risk of a 51% attack — similar to this week’s situation, GHash.io was approaching 50% at the time.

Antonopoulos smiled when he heard this question, like a baseball player who knew he was about to hit it out of the park. He characterized the 51% attack as an interesting concept to think about, but not something that has real-world implications for Bitcoin overall. This is because the extreme effort required to execute the attack would not be worth the temporary benefits it provides. The network would quickly react and implement countermeasures within a couple of hours. Antonopoulos explains further:

So unless we were all not paying attention — and trust me, we are, because GHash.io has now become a huge topic in this community — there’s nothing they can really do with that. You can’t run away with everyone’s coins just because you got 51%. All you can do is affect the next block. So you can affect the next block and create a double-spend. Big whoop.

Based on that analysis, the idea that a 51% attack is a threat to Bitcoin’s very existence is simply not true. It only allows an attacker to hijack the blockchain for a limited amount of time before the rest of the network — the real, genuine network — responds accordingly and neutralizes the threat.

Assessing the Real Risk from Large Bitcoin Mining Pools

That makes two Bitcoin experts who don’t consider this a credible threat to the network. It is both extremely unlikely to happen, and easy to address if it did happen. This kind of sobering analysis should serve as comfort for anyone whose blood pressure rises in tandem with GHash.io’s hashrate — rest assured that the theoretical 51% attack will probably never happen, and would just be a temporary problem anyway.

Practically speaking, Bitcoin would undoubtedly get some negative press over such an attack. The media would have a field day with the issue and prematurely call it the “death of Bitcoin,” just like they did when Mt. Gox went bankrupt. The exchange rate would probably fall somewhat as well, as investors get cold feet after hearing news of the attack. However, these would all be short-term issues of public perception — a particular kind of hurdle that Bitcoin is all too familiar with.

Clearly, the theoretical 51% attack is not an existential threat to Bitcoin, even if it could have negative short-term repercussions in the following days. Hopefully we will never have to find out exactly what those repercussions look like.

Watch Andreas Antonopoulos’ full response to the question about 51% below:

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I still don’t know if I should be worried about a 51% attack or not.