Bitcoin has a structure that is difficult to hack due to its decentralized nature. Blockchain networks are generally resistant to security breaches. So why? Why can’t Bitcoin be hacked?
Decentralized Open Source Protocols
The blockchains behind most cryptocurrencies are peer-to-peer (P2P), open source, and public, allowing anyone with the right equipment and knowledge to peek into the background. This is important to promote transparency and attract buyers.
A blockchain consists of different technological mechanisms working together towards a common goal. For example, there are consensus mechanisms such as proof-of-work (PoW) and proof-of-stake (PoS) that protect the network by mitigating cyberattacks from hackers. The decentralized nature of a blockchain means that its network is distributed across multiple computers known as nodes. This eliminates a single point of failure. In other words, there is no way to “cut off the snake’s head” – because there is no head.
The architecture of a blockchain determines how nodes cooperate to validate a transaction before connecting to the protocol. In the case of Bitcoin and other PoW systems such as Bitcoin Cash, a minimum of 51 percent of nodes must accept the transaction before committing.
Hash Algorithm
Each transaction is called a block, and linking several transactions together becomes a blockchain. Specifically, a block has cryptographic elements that make it unique. A network’s hash algorithm determines the details. For example, the Bitcoin blockchain uses the double SHA-256 hash function that takes transaction data and compresses/compresses it into a 256-bit hash.
By making it harder to reverse the hash, a transaction becomes solid. Each block in a chain contains a specific set of data from the previous block. Therefore, even if a malicious actor reverse-engineers the hash, the resulting block will not be in sync with other blocks, as the resulting block will output a different hash, causing the system to reject it.
51 Percent Attacks Are Improbable
The longer a blockchain exists and the more new users it attracts, the less likely it is to be attacked by 51 percent due to its increased hashrate.
This becomes prohibitively expensive at a certain point. Therefore, such a scenario is nearly impossible given the size of established blockchains like Ethereum and Bitcoin.
How to Hack Bitcoin?
Notable 51 percent victims of attacks include Ethereum Classic, Bitcoin Gold, Electroneum, and most recently, Grin. The Ethereum Classic network uses the PoW consensus algorithm. While Bitcoin uses the same algorithm, ETC has far fewer nodes and miners securing the system. Therefore, it has less processing power and makes it easier for an attacker to take control.
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