This question cannot be answered unequivocally. Technically, it is possible to pick up a private key and get access to the cryptocurrency. However, it will take a lot of time. It is estimated that it would take about 38593493520073954175290290747912192 years to crack a simple, old bitcoin wallet using mid-range video cards.
Hi, it’s Alex! A blockchain expert and researcher of cryptocurrency exchanges for over five years. Artex Global readers often ask about the possibility of cryptocurrency hacking, so I had to reread a lot of information to answer all the questions at once. In the process, this article was born. Let’s figure it out together.
Is it Possible to Hack Blockchain
Blockchain is the immutable records technology at a fundamental level by which transactions are verified and recorded in a distributed system. It was chosen as the standard presumably because decentralization is more reliable in securing coins, digital wallets, and other assets. On top of that, blockchain-related data flows are encrypted and run on the periphery of the network.
The blockchain ecosystem operates under consensus rules. For example, blocks can only create a certain number of bitcoins; transactions must have a specific format and correct signatures for the bitcoins being spent. A transaction cannot be conducted twice within the identical blockchain.
Blockchain cannot be hacked by attacking the encrypted traffic of an individual node: if consensus rules are violated in a block, the blockchain system denies the transaction to the particular node, even if other nodes believe that the recording chain has not been invaded. Some experts believe that blockchain hacking is theoretically possible. Below are a few attack vectors.
51% Attack Definition
Although the workability of this method is proven theoretically, it is practically impossible to implement. If a person owns more than 50% of the computing power available in the blockchain, he can effectively control the entire network. However, this method is feasible only with the Proof-of-Work algorithm. At the same time, in Proof-of-Stake, a person must own more than 50% of the total market capitalization of a particular asset.
Taking bitcoin as an example, it is easy to calculate that acquiring 51% of its issue would cost you a whopping $79 billion. This makes a 51% attack impractical and more than clearly explains the advantages of the PoS algorithm over PoW. But even if someone managed to get more than half of the hash power, that opens up only limited opportunities for an attacker.
Because blockchain is supported by a vast number of nodes scattered around the world, they cooperate to achieve consensus — the more extensive the network, the stronger the protection against attacks and data corruption. Consequently, a 51% attack on any blockchain becomes less and less likely as the size of the network increases. This is why blockchain has the right to be called the most secure and reliable technology ever created.
Hacking Blockchain Cryptocurrency ZenCash
Hackers have proven that even a distributed blockchain structure can be hacked. All you need is a powerful computer. A mighty one. Cryptocurrency ZenCash came under attack: it suffered a 51% attack.
More extensive blockchain networks, such as bitcoin, are unlikely to be vulnerable to such a threat. It would cost $717,000 to keep 51% of the bitcoin network under control for 1 hour. Even if someone decides to allocate that amount of money, there isn’t that much computing power in the world that can be rented. With ZenCash, this is easier to do: the 51% attack on ZenCash cost about $31,000. At the same time, the hackers earned several hundred thousand dollars.
A blockchain threat can lurk within an ecosystem whose participants can gain de facto control over nodes and ownership shares. An example is the Sybil attack, in which the victim only connects to nodes controlled by attackers. The latter manages to trick the blockchain by installing false identifiers.
However, blockchain developers anticipated this type of attack. Bitcoin recognizes this type of attack thanks to a proof-of-work algorithm for nodes that mine coins. The main advantages of the algorithm are protection from DoS-attacks and the low impact of the share of cryptocurrency owned by the miner on mining capabilities. Blockchain projects cope with the Sybil attack in different ways but mostly do it successfully.
The Blockchain Ecosystem
While the structure of the distributed node system itself is relatively well protected, its supporting elements, which are involved in, for example, cryptocurrency exchanges, are much less secure. The security of wallets, exchange procedures, and third-party accounts raise serious concerns.
There are a lot of rumblings about cryptocurrencies and blockchain, and it is very difficult for a person who does not understand all the intricacies to make sense of them. In any case, if you are going to plunge into this world, you need to follow all the news of the industry and understand all the processes in more detail. Our blog will definitely help you in this: every week we publish interesting articles about everything related to blockchain, for example, about Bitfinex cryptocurrency exchange or cryptocurrency exchange in the UK. Join in!
I have been studying cryptocurrency for over 5 years. I have accounts in every exchange and I test everything on myself.
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