Election results cannot be faked, entries in the state register cannot be rewritten. But is everything so cloudless? What about Attack 51? Why can’t unanimous hash control be allowed and when will bitcoin be hacked? Are the governments of different countries sabotaging the implementation of the blockchain, feeling that they can lose their omnipotence?
Digital wall
The security and validation of data makes the blockchain indispensable. Impossibility of change of the data gives huge prospects. Forgery of voting results, manipulation of analyzes and forgery of documents will become impossible.Despite such optimistic expectations, many are still cautious and in no hurry to transform the existing system. Perhaps the fear of becoming unnecessary and fears of the disappearance of corruption are one of the reasons?“Blockchain can crush autocracy. The technology is the power of change, it offers decentralized and counterfeit-proof solutions,” Lado Okhotnikov, founder of the Meta Force Metaverse.Unlike traditional databases, the blockchain runs on a distributed ledger where transactions are recorded in a “log” that is available to anyone at any time. That is, anyone without anyone’s consent can independently check the results and verify the reliability of the data. And for this, he does not need a “heavy” bureaucratic system with a bunch of certificates and permits.
Blockchain resembles an ordinary database. Only in our case, the information is not stored on one server, but is distributed over “nodes” – nodes in the network that store copies of all blocks.This is the whole point of decentralization – if a node becomes unavailable for some reason, the rest will continue to work as if nothing had happened. At the same time, none of the participants will be able to single-handedly change the information until this is confirmed by the majority.The principle of proof-of-work is based on a mathematical problem that nodes solve in order to add a new block with transactions to the block chain. This operation is very complex and requires a lot of computing power.Computers competing to solve a problem are called “miners”. The first miner who successfully solves the problem receives a reward in the form of tokens and commissions for processing transactions. After that, the found block with added transactions becomes part of the blockchain.This approach makes the system safe and reliable. Since in order to forge or change existing records, attackers would have to recalculate all the blocks, simultaneously solving mathematical problems for each of them. This, in turn, is practically unrealistic due to the high complexity and high costs.In a simple way
The “attack 51%” has long been a hot-debated topic in the cryptocommunity. This issue does pose a potential threat to network reliability and security. But what is the cost of such manipulation?Attack 51
Blockchain hacking process.
At first glance, it may seem profitable to mine a few thousand bitcoins, but the reality is far from simple. To carry out an attack, an attacker will need colossal resources – equipment and energy. These are millions and even tens of millions of dollars.Let’s look at it from the other side.The only way to cheat the system is to double spend. This is when someone sends the same tokens multiple times to different addresses. For example, first transfers 1000 bitcoins from the wallet to the balance of one exchange, and then quickly performs the same operation to another.To double spend, you need to own 51% of the hashrate, which will give you control over the creation of blocks. Only in this case it is possible to confirm transactions that were carried out earlier than others.However, not all so simple. You cannot undo the actions of other people who were not involved in fraud. You can’t prevent transactions from being sent, but you can leave them unconfirmed. It is also not allowed to send bitcoins from an address that does not belong to you. Finally, it is impossible to create tokens out of thin air, even if you control 51% of the hashrate.
Whoever controls 51% of the hashrate makes the chain longer. The network accepts it as correct, and discards the other. This means that both transactions for 1000 bitcoins become valid. Thus, tokens from the “correct” blocks remain at the address of the attacker, and he sells them, receiving fiat in return.However, protection against such attacks exists. Exchanges require several transaction confirmations before crediting funds to a user’s account or making them available for trading.Although theoretically a 51% attack is possible, in practice it is very expensive to carry out, which makes it unprofitable.“Blockchain hashrate 390 EH/s. You need at least 200 EH/s to attack. In the calculation, we assume that you already control the hash and do not allocate a new one.To maintain a speed of 141 TH / s, you need to have at least 1,411,347 Antminer S19 XP asic miners.With the price of one kilowatt-hour of 6 cents and the cost of one machine of 3.05 kW, you will need to spend 6,198,624 dollars for all asics per day.But there is a nuance: where to place so many miners and get so much energy, because the attack will not be limited to one hour of work,” Lado Okhotnikov shares entertaining mathematics.There is another obstacle as well. When a fork occurs (the blockchain branching into several versions), exchanges increase the number of confirmations for security and to prevent double spending.If one pool controls 51% of the network hashrate, which makes it more powerful than all the others, the network simply increases the number of confirmations required to deposit funds into the account.Let’s imagine you have 51% of the hashrate and you are trying to double spend. In this case, the exchange will require, for example, 128 transaction confirmations.To overtake the original chain of blocks, you will need your own chain, which will be longer. But with at least 1% more power, you will come to significant technical difficulties: it will take weeks for mining to reach the goal.Who is willing to spend even $40 million on a dubious undertaking?How It Works
During the existence of bitcoin, it was not possible to hack the blockchain. Surely there were attempts, but they did not lead to anything. Since the system is so reliable, why don’t they want to implement it at the state level?Blockchain has the potential to lead the evolution of the voting system. Using this technology, the electorate will be guaranteed that the results will remain genuine and reliable.The information recorded in the block cannot be changed, which prevents unauthorized intervention, ensuring the integrity of the voting process. What’s more, citizens can verify their votes without disclosing their data, which builds confidence in democracy.Outside of politics, blockchain can also exist. Technology is an invaluable tool in healthcare, finance and supply chain management. For example, medical records can be stored securely on the blockchain, ensuring privacy and preventing unauthorized changes.Lado Okhotnikov argues that if mining were the same natural process,“If we talk about decentralization, then citizens could just pay taxes by mining. And then each “iron” would slowly calculate smart contracts, which would completely cover the entire jurisprudence of the household. Not for making money. For civic responsibility and solidarity”.In the financial sector, blockchain allows transactions to be made faster and cheaper, eliminating intermediaries and providing transparency.Despite this, so far only a few are trying to implement the technology: Japanese automotive giant Hyundai Motor Group will track carbon emissions in an AI-enabled supply chain”;Toyota GR Cup plans to record driver achievements and race results on the Polygon blockchain”;India has introduced a blockchain-based cadastral registration”. And such news began to appear more and more, because the adoption of the blockchain means a departure from traditional centralized systems. But the fear of losing control hinders progress.While transparency increases accountability, it also leads to resistance from those who have an interest in maintaining the status quo.However, many are beginning to realize that the benefits outweigh the potential challenges. Estonia, Singapore and the United Arab Emirates have already made progress towards integrating blockchain into their governance and administration systems. By doing this, they are trying to use the full potential to increase the confidence of citizens.However, there are those who resist with all their might.In Shanghai, the Chinese police carried out background checks on passengers without a warrant to detect VPNs and foreign apps: Meta (formerly known as Facebook), YouTube, Twitter and others.Chinese police in Shanghai checked passengers’ cellphones without a warrant for VPNs and foreign apps Facebook, YouTube, Twitter…etc.If you get caught with installing these apps, you could get arrested immediately and face jail time pic.twitter.com/uykoc8pVjM— Wall Street Silver (@WallStreetSilv) August 1, 2023Growth potential
Lado Okhotnikov: “Total control is not an option”
The question of whether governments are boycotting the implementation of the blockchain gives rise to various opinions. It cannot be unequivocally stated that everyone has the same attitude towards blockchain and cryptocurrencies. In reality, the situation is different and depends on many factors.“Blockchain will never be implemented as part of a state program, then this is the end of centralization. The government would rather make a simulacrum. They will give you a chance to feel something that does not really exist. And they themselves will continue the policy of introducing CBDC”, Lado is worried that total control will absorb all areas.Some understand the potential of the blockchain and strive to become leaders in this field. Such countries actively support and develop laws that promote the adoption of technology. They see blockchain as a means to improve the economy, improve government, and improve security.However, not everyone perceives innovation positively. Some fear losing control over economic and financial processes. For example, America is leading the way in this matter. Just look at these headers: The US government has launched an investigation into the activities of the world’s largest investment company BlackRock”;The US Department of Justice is considering filing fraud charges against Binance”;The US Senate passed legislation to tighten regulation of crypto exchanges.” But on the other hand, there is also strong opposition. Federal Reserve Chairman Jerome Powell says, “Cryptocurrency appears to have sustained strength as an asset class.”Or this: “U.S. Congressman Warren Davidson Calls for Ban and Criminalization of CBDC.”In justification, one can only say that the blockchain can be used for illegal activities, among which money laundering or terrorist financing will seem the smallest. Some worry that cryptocurrencies will become a vehicle for tax evasion or to circumvent sanctions.In general, it cannot be said that there are clear signs of targeted sabotage. Some seek innovation and technology development, others are afraid of possible threats. It is important to strike a balance between supporting innovation and ensuring safety. Both with cryptocurrency and with the technology itself, compromises are needed, taking into account the interests of citizens and national needs.
