51% Attack!
BTCBTC
What will happen if most of the miners in the bitcoin network are cheaters — or the bad guys? That really does not matter given that all those bad guys do not work together. But, in case if all those bad guys work together or in other words, at least 51% (more than 50%) of the total computational power of the bitcoin network is owned by one or a single group of miners, that’s not a healthy situation for bitcoin. In practice, it’s a huge investment to gain 51% of the total computational power of the bitcoin network. Let’s say someone still does it — what would happen next?


Before answering the above question, I guess it’s worth looking at what is actually meant by this 51% ownership of total computational power of the bitcoin network. In the above diagram, let’s assume the total bitcoin network, with all the miners (4 in this case) can generate 100,000 hashes per second. That’s the total computational power of the network. For the simplicity, let’s say all the miners start mining at the same time — and each miner has it’s own computational power. The first miner can generate 25,000 hashes per second, while the second miner can generate 40,000 hashes per second. Now all these miners are in a race to find the magic number to solve the difficulty puzzle. What is the chance each miner has? The first miner has 25% of probability, while the second miner has 40% of probability. To make it much simpler, in a lottery ticket draw, if we own more tickets, you have a higher probability to win the prize — but it’s just probability — even a person who has bought just one ticket can win the prize.
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What will happen if most of the miners in the bitcoin network are cheaters — or the bad guys? That really does not matter given that all those bad guys do not work together. But, in case if all those bad guys work together or in other words, at least 51% (more than 50%) of the total computational power of the bitcoin network is owned by one or a single group of miners, that’s not a healthy situation for bitcoin. In practice, it’s a huge investment to gain 51% of the total computational power of the bitcoin network. Let’s say someone still does it — what would happen next?