A method by which bad actors can potentially reverse or erase existing blockchain transactions by controlling more than 50% of the processing power in Proof-of-Work cryptocurrency

1.Double Spending

Here’s how a 51% attack can be used for double spending:

-The attacker sends coins to person ‘A’, while sending the same coins to person ‘B’. While the coins sent to A are publicly displayed on the blockchain, the attacker, who has massive hashing power, secretly mines blocks for the double-spend transaction to B without exposing it to the rest of the network.

-After a few confirmations on the public blockchain where transaction A is valid, the attacker presents to the network his hidden mined blocks, where transaction B is valid. Since he has so much mining power, he can probably create a longer blockchain than the original one and validate his blocks.

In this case, the transaction sent to A will be canceled since it does not appear on this new, longer blockchain.

-The result: A ends up with no money, and the attacker may have already gotten the service he paid for.

2.Blocking Transactions

-Anyone who controls the majority of the hashing power can decide which transactions to include in the next block. Due to that, an attacker can even decide to build a completely empty block with no transactions.

1.)Change Of Consensus Algorithm

-Switching to a different consensus algorithm serves as a viable approach in reducing the likelihood of 51% attacks. Proof of Work (PoW), the initial consensus mechanism employed by many blockchains, renders itself susceptible to such attacks due to its mining concentration risk.

-Alternatively, the Proof of Stake (PoS) consensus mechanism is less prone to such attacks as it requires a hacker to possess the majority of the blockchain’s total stake, often a prohibitively expensive venture.

2.Delaying Blockchain Confirmations

Another effective deterrent involves delaying blockchain confirmations. This method buys time for the network to detect and potentially ward off a 51% attack.

3.Penalty System

Instituting a penalty system serves as another viable defensive strategy. For instance, the application of slashing conditions in PoS blockchains penalizes malicious actors by confiscating a portion or all of their staked tokens if they are found to be acting against the network’s rules. This punitive measure significantly raises the stakes for any would-be attackers and can serve as a potent deterrent