Before you explore the types of attacks, it is helpful to remember that a blockchain network is comprised of nodes. Each full node has a copy of all the transactions that have already happened on the network. Verifying that all the copies match is part of what keeps the blockchain honest. Each node is like a check and balance for the other nodes.
Nodes can also be responsible for verifying/mining new blocks of transactions, and receive the newly minted coins (block rewards) that are associated with verification/mining. Verification/mining typically involves some sort of cost or collateral. In Proof of Work blockchains, this cost is the amount of electricity (work) needed to compute a valid block. In Proof of Stake systems, there is often collateral of the native currency posted (stake) to ensure that the person validating the transactions has an incentive to stay honest, or else their posted collateral will be penalized. For more on this and other blockchain models, see the "Consensus Protocol Academy & Glossary".
The most known and feared security threat to blockchains is a 51% attack. This is where a majority of the nodes (51% or more) collude to falsify the blockchain ledger in their favor. If these dishonest users form a majority and control the blockchain, then they can double-spend coins, where the holder makes a copy of the coins and sends the copy to a merchant or other party while also retaining the original coins. In a 51% attack, malicious users can transfer coins to their wallet multiple times by reversing the blockchain ledger as though the initial transactions had never occurred.
It is difficult for attackers to control records of blocks that are already finalized, since a fraudulent version of the public ledger would quickly be spotted and rejected by other nodes. However attackers can easily control block records while they have majority control of the network. 51% attackers can also prevent other miners from completing blocks, allowing them to monopolize the mining of new blocks and earn all of the block rewards (newly minted coins).
HOW TO PREVENT A 51% ATTACK
The best way to minimize chances against a 51% attack is by promoting diverse user adoption within a blockchain network. The more nodes there are, and the more anonymous and widely-distributed these nodes are, the less likely it will be for malicious actors to control a majority of them.
An attacker (group) would have to find and influence at least 51% of all the full nodes that exist in a network, or launch enough new full nodes to outnumber the ones already in existence. This gets prohibitively expensive. In the Bitcoin network, that would mean a hacker (group) launching at least 10,000 new (malicious) Bitcoin full nodes. In order to do this, they would need to buy enough computer storage to house the 10,000+ copies of the ledger. In Ethereum's Proof of Stake system, the hacker (group) would have to launch a majority number of full nodes, and lock in 32 ETH worth of collateral in each node, only to have that stake taken away once their attack is discovered.
In a Proof of Work (PoW) blockchain, like Bitcoin, fixing a 51% attack is a mater of forking the network into a new protocol that makes all the old miners (including the attackers') obselete. All participants who want to continue to validate blocks will have to upgrade to the new software. This can be costly to users who were being honest. In a Proof of Stake blockchain, fixing a 51% attack is a matter of forking the network to simply delete the attackers' coins. It is not as impactful to the entire network.
NETWORK IMPROVEMENT PROPOSALS
Some of the strongest blockchain networks are the ones that are constantly improving. A great way to evaluate this is by tracking activity on their code repositories. Here is a link to examples in the Crypt Keeper by Criteria GitHub Data.
It is also a good idea to look into the official improvement proposals for a given network. Here are some examples:
For many users who want to run a node and support the blockchain, having enough bandwidth to run the node can be a problem. Another problem in some countries is censorship against certain blockchain technologies. One of the best ways to circumvent these problems is with a satellite connection-
BA in Economics. BS in Finance. Hostess of the Crypt Keepers’ Club. Passionate about research and data. I don’t fold sheets, I spread them.
Connect with Me:
Note that you must be logged into Facebook to be directed to my page.
DISCLAIMER: Information is constantly evolving. Do more research. Be accountable for your decisions. ALL INVESTMENTS ARE DONE SO AT YOUR OWN RISK!
Have something constructive to add? Do so in this comment box, below. BE KIND! Insecure egos do not appeal to anyone's better nature.