What Is a 51% Attack?
Most people who buy Bitcoin know it is a digital asset existing on a blockchain. Thanks to its decentralized nature and built-in incentive schemes, blockchain networks are extremely secure. However, as investors—especially those holding cryptocurrencies for the long term—we must keep learning about potential risks. We sometimes hear claims that quantum computing is one of Bitcoin's biggest dangers, or wonder what would happen if the whole world experienced a power outage. Over the next few weeks, we will examine some of these risk predictions. This article focuses on what is called a '51% attack.'
A 51% attack on the Bitcoin blockchain occurs when a single entity gains majority control over the network—specifically, when it accumulates more than half of the global hash power. In such an attack, a miner has enough computational power to manipulate the ledger, effectively removing decentralization. The attacker can modify transactions, potentially causing double-spending (the same funds spent twice). They can also prevent transaction confirmations, hinder other miners, and even become the sole miner on the network, creating a mining monopoly. However, a 51% attack cannot reverse transactions or steal Bitcoin from other wallets.
How Likely Is a 51% Attack?
Generally, the larger and more distributed a network, the more secure it is. For proof-of-work (PoW) blockchains like Bitcoin, a miner's hash rate determines their chance of finding the next block solution and earning the block reward. Each block adds 6.25 newly mined Bitcoins (currently worth about $237,000) plus transaction fees from that block. In the future, when no more Bitcoins can be mined, the price will rise so that fees alone cover mining costs. This incentive structure encourages miners to accumulate hash power while maintaining blockchain integrity. Attacking the blockchain would be like setting one's own house on fire, so miners are considered guardians of the network. Moreover, Bitcoin's network is huge, with mining facilities worldwide; the probability of any individual or group amassing enough hash power to take over is negligible. Even if an attack occurred, it would be short-lived. Other nodes and miners would coordinate to protect the network, as Bitcoin is resilient to such attacks and is considered the world's most secure cryptocurrency and network.
Industry Transformation
Just a few years ago, asking 'Will Bitcoin suddenly go to zero?' might have made some sense. Today, that conversation is largely irrelevant. Bitcoin is an extremely powerful technology offering a system far superior to current financial systems. While it may not replace all currencies, it is likely to become an important safe-haven asset and store of value, especially as global payments become increasingly digital. The coming years will likely see significant growth and innovation in mining, particularly around renewable energy, as a means to boost local economies. With such mass adoption, the likelihood of a 51% attack will diminish further.
About AAX
AAX is an international cryptocurrency exchange with over three million users worldwide. Leveraging LSEG technology from the London Stock Exchange, AAX offers a one-stop crypto service including futures trading, 200+ spot trading pairs, P2P cash trading, wealth management products, and professional-grade API trading. Open an account on AAX now, or download the AAX Mobile App to experience the next-generation cryptocurrency exchange.