Bitcoin is considered hacking-proof because the entire network constantly checks the Bitcoin blockchain. Therefore, attacks on the blockchain itself are highly unlikely.
- Thanks to its decentralized and distributed nature, blockchain technology is well suited to defend against hacker attacks.
- One of these apocalyptic scenarios would be known as a 51% attack.
- Bitcoin itself hasn't been hacked since its inception
- Interfaces, such as wallets, where cryptocurrencies are handled, remain vulnerable to attack.
- On the contrary, people and websites have been hacked as they are much easier targets.
In this lesson, you will learn why it is difficult to hack a blockchain, and yet it is still possible.
Cryptocurrency: Why can Bitcoin be considered piracy proof?
To add a new block containing a collection of transactions, each participant (miner) updating the Bitcoin ledger is continually solving complex mathematical problems.
If a specific block is added to the database, all nodes on the network must agree on the validity of that block. Only if all nodes agree, the Bitcoin ledger is updated accordingly.
Manipulating a cryptocurrency network is extremely difficult. Erasing or overwriting an already spent Bitcoin block, known as double-spending, becomes impossible due to the energy-consuming computing, chronological and decentralized features of the Bitcoin blockchain.
What happens when someone tries to hack into the Bitcoin blockchain?
Cryptocurrency: As you already know, there is not a single copy of the Bitcoin blockchain. Instead, there are thousands of copies stored in nodes on a computer network. These nodes are scattered all over the planet and contain all the Bitcoin transactions that have taken place so far.
A hacker, who wanted to manipulate the distributed ledger of Bitcoin or any other network based on blockchain technology, would need to hack not one, but more than half of the participating computers (51% attack).
Cryptocurrency: What is a 51% attack?
Cryptocurrency: A 51% attack is possibly the most significant threat to blockchains. Such a scenario would look like this: If a single individual or organization were to succeed in taking control of most of the mining power of the networks (hash rate), the transaction history of the Bitcoin network could, in theory, be changed and overwritten...
A majority (hence 51%) is always required to decide which transactions to approve and which to reject. This means that a 51% majority could potentially alter a blockchain's distributed ledger in a way that allows for double-spending (executing the same transaction multiple times). However, this situation is extremely difficult to achieve and is highly unlikely to occur.
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