51% attack – what is it in cryptocurrencies?

A 51% attack is employed in blockchains built on Proof-of-Work (PoW) consensus. Such blockchains require a large amount of computational power provided by miners to maintain their operations. It is the miners who, through complex calculations based on a specified algorithm, confirm transactions and, as a result, mine new coins.

PoW ensures network decentralization as the blockchain is governed by a multitude of individuals worldwide independently. However, there is one vulnerability in the form of a network hacking attack.

A 51% attack implies that if a malicious actor obtains 51% of the blockchain's computational power, they can create an alternative chain of blocks. Consequently, the mining of new tokens and the confirmation of transactions may be halted in the resulting chain.