BLOCKCHAIN ATTACKS: DOUBLE SPENDING & 51% ATTACKS.
Blockchain attacks refer to various malicious activities that attempt to disrupt or exploit the security of a blockchain network. Blockchain attacks can target any aspect of a blockchain system, including its protocol, consensus mechanism, or smart contract code.
Double spending attacks:
In real world cases, its impossible to use physical money twice because you transfer the value physically and take good and services against it; therefore, you cannot re-use it while in the case of digital money, there is a technical flaw which is known as double spending in which a cryptocurrency tender can be utilized multiple times.
In normal scenario, if you have some cryptocurrency and you want to transfer the cryptocurrency to person A, the transaction will be added to the unconfirmed pool of transaction where miners will verify the transaction through confirmation process and then the transaction will be added in the block and published on the blockchain.
Lets say Max has 5 digital token of any cryptocurrency and he wants to buy product from mike which cost him 3 tokens, if max send 3 tokens directly to mike the transaction is legitimate, but if max send these 3 tokens to mike and Charlie simultaneously at their wallet addresses then it will be considered as double spending. Since, digital tokens are simple files which can be duplicated and can be sent to multiple recipients. The goal of the bad actors is to get second transaction confirmed from network before 1st transaction gets verified and this how he can be successful in double spending.
As a result of failed transaction, Charlie didn’t get the money as Charlie had already delivered the product /services to max but Charlie is not at fault for this unsuccessful transaction. Therefore, now most of the vendors who deal in cryptocurrency wait for 6 blocks confirmation (which means 5 subsequent blocks for extra security and genuineness of transaction). However, the number of confirmations from network miner depends on the amount of the transaction. After addition of subsequent 5 blocks, now the recipient can assume that the transaction is legit and cannot be altered or reversed . Nonce is number occur once that prevents double spending.
51% Attacks works:
Due to non-availability of third party, network nodes are required to verify transactions through their device’s computational power and solve complex cryptographic puzzles. This process is also called proof of work mechanism.
In 51% attack, the goal of the bad actor is to get control of more than 50% of network computing power, which is used to mine coins that will allow him to change transaction history. reverse transaction and in some cases, he has the power to make entirely new versions of blockchain. Bad actors can acquire 51% computational power in a blockchain network through renting hash rate from cloud mining services. buy expensive hardware to which gives them direct control over the computational power, by creating or joining a mining pool that they control or a group of miners who together control more than 50% of the network’s computational power. This would allow the bad actor to carry out a 51% attack without needing to gain access to as much computational power themselves.
Having said that, in recent times, most established blockchain networks have measures in place to prevent 51% and other types of blockchain attacks, making them difficult to execute in practice.
A race attack, also known as a “finishing attack,” is a type of attack on a blockchain network in which an attacker attempts to manipulate the ordering of transactions by submitting multiple conflicting transactions simultaneously. The goal of the attacker is to have the first of these transactions to be confirmed by the network, while the others are rejected. This can allow the attacker to double spend funds or perform other malicious activities.
In a race attack, the attacker creates two conflicting transactions, one of which is valid and the other is invalid. The attacker then simultaneously submits both transactions to the network in an attempt to trick the network into confirming the invalid transaction. This can be accomplished by exploiting the delay in the time it takes for a transaction to be broadcast to the network and confirmed by the nodes.
A Finney attack is a type of attack on a blockchain network in which an attacker manipulates the network by using his own mining power to confirm his own transactions. In a Finney attack, the attacker first mines a block on the blockchain, but instead of broadcasting it to the network, he keeps it private. He then uses this block to confirm a transaction that he has created, such as double spending a cryptocurrency. The attacker then releases the mined block to the network, making the double-spent transaction appear legitimate.
Finney attacks are a type of 51% attack, in which an attacker has control over more than half of the mining power on a blockchain network. This gives the attacker the ability to confirm their own transactions, as well as to reject or modify the transactions of other users.
A Sybil attack is a type of security attack on a decentralized network in which an attacker creates multiple fake identities, or “Sybil nodes,” in order to manipulate the network or disrupt its normal functioning. The attacker can use these fake identities to conduct malicious activities such as spamming the network, creating false information, or disrupting communication between legitimate nodes.
In a Sybil attack, the attacker tries to gain control over a large portion of the network by creating many fake identities, making it difficult for other users to distinguish between legitimate and fake nodes. This can result in a variety of security and privacy issues, including censorship and data tampering.
Sybil attacks are a major concern in decentralized networks, particularly in peer-to-peer networks, and various techniques have been developed to detect and prevent them. These techniques typically involve using cryptographic methods to establish the identity of nodes in the network and
limit the number of identities that a single attacker can create.
An eclipse attack is a type of attack on a blockchain network in which an attacker isolates a node from the rest of the network by manipulating the network’s routing information. The goal of the attacker is to control the information that the isolated node receives and to manipulate the node into accepting false information, such as false transactions.
In an eclipse attack, the attacker creates multiple fake nodes that surround the target node and manipulate the network’s routing information to direct all of the target node’s incoming and outgoing communications through the fake nodes. This allows the attacker to control the information that the target node receives and to manipulate the node into accepting false transactions or blocks.
phishing attacks can target individuals who use or hold cryptocurrency by sending them fake emails or messages that appear to be from legitimate exchanges or wallet providers. These messages often ask the recipient to enter their private information, such as login credentials or seed phrases, on a fake website that looks identical to the legitimate one. phishing focuses on tricking users into giving up sensitive information through emails, messages or fake websites.
Man in the middle attack:
A man-in-the-middle attack occurs when a malicious third party intercepts and modifies the communication between two parties in a transaction.
The attacker essentially “sits in the middle” of the communication and is able to read, modify, or inject malicious data into the communication.
A Denial of Service (DoS) attack is a type of cyber attack in which an attacker seeks to make a computer resource, such as a website or network, unavailable to its intended users. The attacker does this by overwhelming the target system with a high volume of traffic, causing it to become unavailable or to slow down to the point of being effectively unavailable.
Typo squatting attack:
Typo squatting involved making bogus websites to collect user data and use it wrongfully to access personal information or accounts is known as “typo squatting.” Blockchain-based assaults trap people into visiting a website that looks like a cryptocurrency exchange. typosquatting focuses on tricking users into visiting a malicious website through URL manipulation.
A routing attack in blockchain refers to a malicious attempt to manipulate the routing of data in a blockchain network, with the goal of disrupting the normal functioning of the network, compromising sensitive information, or altering the order of transactions. This can be achieved through various techniques, such as impersonating nodes, modifying routing tables, or disrupting communication channels between nodes. Routing attacks can have significant consequences for the security and integrity of blockchain systems, and it is important to have robust countermeasures in place to prevent such attacks.
Hello, this is Zohaib.
I'm a certified cryptocurrency expert and professional banker with over 17 years of experience in trade finance and corporate banking. With a passion for technology evangelism and a drive to help people understand complex digital products, I have dedicated myself to providing clear and concise explanations of emerging financial technologies such as cryptocurrencies, blockchain, and other innovative financial products. Through this platform, I seek to share my knowledge and insights with others, helping them to navigate the rapidly evolving landscape of digital finance.