Introduction
Blockchains are incredibly popular nowadays. Cryptocurrencies are based on blockchain technology, a decentralized network that is considered immutable.
For those unfamiliar with the show, Silicon Valley- is centered around the lives of five programmers and a startup company based in Silicon Valley, California. If you’re a fan of the show and haven’t watched season 5, this is an official spoiler alert!
However, the rise in popularity of cryptocurrencies has encouraged cyber criminals to find innovative ways to attack the underlying blockchain. And let's not ignore the fact that they have been quite successful in this had evolved a lot in the past few years. Hackers have discovered that vulnerabilities do in fact exist. Since 2017, public data shows that hackers have stolen around $2 billion in blockchain cryptocurrency. This recent activity illustrates that blockchain is unfortunately not unhackable and users should still be cautious, especially when trading on exchanges.
Blockchains: The 51% attack?
The season finale is titled “Fifty-One Percent,” and according to the trailer for the episode, it features a crazy twist centered on what’s called a 51 percent attack. This is when an organized group of cryptocurrency miners achieve a majority on a blockchain network, which enables them to hold the network hostage and disrupt it in various ways. On the show, Pied Piper’s enemies start joining the blockchain network until they reach a 51 percent consensus, which gives them the power to “delete all of our users, all of our developer apps, crashes our coin. This would be the end of Pied Piper,” explains Dinesh.
The 51 percent attack does exist in the real world and has been deployed against several coins. In August 2021, Bitcoin SV (BSV) slid about 5 percent value after an attack. Another Bitcoin fork, Bitcoin Gold (BTG), suffered a 51% attack in 2019. Ethereum Classic (ETC), which forked from the original Ethereum blockchain after the infamous DAO hack of 2016, has seen 51% attacks several times. For smaller coins, in particular, rewriting transactions on the public ledger can be damaging because it ruins the legitimacy of all transactions — something that could very well kill the coin. It’s a problem that doesn’t have an exact solution because such miners are taking advantage of the decentralized way the network is built.
But 51 percent of attacks can’t do quite as much damage as the Silicon Valley episode suggests. While messing with a coin like this might crash it, it wouldn’t allow attackers to “delete all of our users, all of our developer apps” as Dinesh suggests. Miners at 51 percent or more have a lot of powers, they can halt transactions and can even be able to reverse and double-spend coins, but they do not have the ability to change the actual rules of the system, nor can they usurp funds.
The extent of these attacks is slightly embellished on the show:
Miners at 51 percent or more have a lot of powers, but they do not have the ability to change the actual rules of the system, nor can they usurp funds. They can rewrite the existing blockchain in a limited fashion: they cannot introduce transactions that don’t already exist, they can omit any transaction that they want, and they certainly cannot change any of the existing rules
Said Cornell University professor and developer Emin Gün Sirer
As Sirer suggests, Hollywood often takes liberties when it comes to the depiction of real-world scenarios. That is the art of storytelling on television, the bigger and bolder a story or scenario the more exciting it is for the viewer.
We can't say that it's just easy to hack a decentralized blockchain with a 51% attack and we mustn't trust cryptocurrency in general- No!
It’s almost impossible to pull that off in established blockchains like Bitcoin and Ethereum. This phenomenon has been experienced by some small chains that are not really decentralized
Said Avinash Shekhar, Co-CEO, ZebPay.
Blockchains are not boomers!
It is possible to hack a blockchain, Sure But is it likely no, and if that little possibility still scares you then think about it this way, anywhere that you have ever put your private information associated with your money identity or whatever the hell you care about on the Internet is at least a hundred times easier to hack than a blockchain so don't worry about it don't let it make you lose sleep. Blockchains are not likely to be hacked it's sort of like how a lot of people are afraid to fly but you get in a car every day when it's thousands of times more likely that you'll die in a car crash than a plane crash and this is why you've never been to Europe and you've never had that sip of coffee at a Parisian cafe while you looked your love in the eyes and boy it's beautiful anyways
The 51 percent attack isn’t extremely well-known outside of the cryptocurrency researcher community and it does suggest a potentially serious flaw in completely decentralized networks. For people trying to do business on those blockchains, it’s a problem worth acknowledging.