I have been innoculated since 2014 with a simplistic definition of a 51% attack. I have been told that it means a malicious actor takes over 51% of the mining power. No, it is not. First, there is no room for morality in a decentralized consensus system like Bitcoin. Many Bitcoiners base their entire attitude on this single fact – that you cannot judge and decide which transactions are good and which are bad. The code decides, and the chain is immutable. So, there are no malicious actors, only selfish people trying to reach their goal, which for the most part, means getting more Bitcoin by validating transactions. The end goal is capital enrichment of self. So if someone tries to disrupt a network by taking over 51% of miners, it is the same situation as with normal mining – they are just reaching their goal and as long as the code allows for it, it’s OK.
Then I have been told that PoS coins are immune to 51% of attacks. That is also false. We need to take a deeper look at what a 51% mining situation causes in PoW to uderstand why. The basic property of Bitcoin is not an application or a protocol, it is the network aspect. Bitcoin is a special type of network, a consensual one. This means that the goals of the network are defined by what the majority wants. Why is this important? The 51% majority which you may call a group of malicious actors are malicious only from your point of view. And since you do not own more than 50% of the network anymore, too bad, your opinion is less relevant and the 51% group shapes the purpose. Right now, the purpose is transaction rewards, block generation with included transactions. But only because the majority thinks it’s a good idea.
The worst thing is not the 51% of the mining power, it is the 51% of the opinion. As long as the network is fragmented to smaller mining segments, the change of the paradigm is unlikely.
In Bitcoin, the opinion can be expressed through mining. That’s not because mining is essential for it’s existence, but because it has been arbitrarily chosen as the agent of the network opinion status. Not mining, but consensus is important. And consensus is incredibly susceptible to attacks. Sybil and 51% attacks are two iconic examples, but we might have forgotten what they have in common, they are both consensual, or network integrity attacks.
Since consensus equal network integrity, we need to look at other types of “attacks” which impact the network structure. And these are forks. Yes, forks are also consensus attacks, sometimes unintentional as with the switch from BerkeleyDB to LevelDB in 2013. Sometimes intentinal, as with the ETH/ETC split.
When the network splits, it changes from let’s say 3500 nodes to 2x 1750 nodes. There are still individuals, but they now have some kind of an incentive to group in order to destroy the other group. In a non-malicious unintentional situation, the incentive usually is keeping the blocks which they mined and got the reward for. The advantage of POW is the simple fork resolution because of the computational power rules which cannot be cheated, we soon know which group won and which was defeated and we carry on, pretending there were never two groups. But there are daily many forks in Bitcoin, as Andreas Antonopoulos noted. The network is weakened, fragmented, and full of conflict.
I am finally getting to the notion why PoS systems are not safe from 51% attacks. If you remove POW mining, you need to set other principles in it’s place. Principles, which represent the network consensus. When done in a decentralized fashion, it always means that you prefer the nodes to express their opinion individually instead of organized groups, because organized groups want to get rid of each other, while individuals look for the lowest common denominator. And a 51% attack happens whenever a group starts forming. Due to the nature of consensus, such groups, leading to forks – which might be caused by something as small as a database system upgrade or network fragmentation, need to form and threaten the existence of the status quo by inflicting a network health crisis.
You don’t have to own 51% of coins or the mining power. Or you have to do is create groups. e.g. unplug some intercontinental network device and you end up in the same situation. Or start a propaganda campaign.