A 51% attack occurs when someone controls the majority of mining power on a Proof-of-Work blockchain network. This means that the majority block verifier can prevent other users from mining and reverse transactions.
While many have assumed that a 51% attack would be carried out with malicious intent, the above case happened as the two mining pools attempted to prevent an unidentified party from taking some coins that — due to a code update — were essentially “up for grabs.”
According to Swann, two miners with majority control of the network — BTC.top and BTC.com — performed the attack in an effort to stop an unknown miner from taking coins that were sent to an “anyone can spend” address following the original hard fork in May 2017. As per Swann’s tweets:
“When the unknown miner tried to take the coins themselves, http://BTC.TOP & http://BTC.COM saw & immediately decided to re-org & remove these [transactions] TXs, in favor of their own TXs, spending the same P2SH coins, + many others … So just 2 miners, in secret & w/ no trouble, took it upon themselves to remove 2 blocks w/ another’s TXs, & replace with their own.”
51% attacks have generally been considered an undesirable and unprofitable option to take funds, as it would require a massive amount of computing power, and once a network is considered compromised, users would ostensibly flee.
According to statistics on Coin.Dance, BTC.top and BTC.com control 43% of the bitcoin cash mining pool.
As Cointelegraph reported, the Ethereum Classic (ETC) blockchain experienced a 51% attack in January. Researchers at the crypto exchange Gate.io reportedly found that an attacker had reversed four transactions, resulting in a loss of 54,200 ETC. The exchange promised to compensate the affected users, and advised other trading platforms to block transactions initiated by the attacker’s address.