51% attack is well-known in the world of Blockchain. It is a potential attack when a single entity or organization requires more than 50% of the network's hash power. If such an attack happens the organization or entity can control the order of transactions. They may reject honest blocks and may accept faulty blocks.
Grin protocol is privacy-focused. It uses proof of work. Grin proposes private and lightweight protocol based on mimblewimble protocol. Mimblewimble protocol summarizes the Blockchain to only keep the final state summary. The launch date of Grin is 15th January 2019, which makes it quite young.
An unknown mining entity took over more than 50% of Grin's hashrate. And hence executed 51% Attack.
A notice is prominent on Grin's website which states:
"IMPORTANT NOTICE: The Grin network hashrate has increased considerably over a short period of time. Notably, this coincides with the nicehash rate doubling in this time with well over 50% of the network hashrate currently outside of known pools. Considering these circumstances it is wise to wait for extra confirmations on transactions for payment finality."
On the 8th of November 2020, 2Miners, one of the major mining pools reported it on a tweet as well.
At the time 2miners reported it, the unknown entity had 57.4% of the total hash rate. 2miners themselves own 24.5% of the total hash rate. As of writing this publication, the unknown mining entity owns not 51% but 58.1% of the hash rate. The intention of the miner is unknown but at least one of the mined blocks is re-arranged.
Usually, in 51% attacks, the malicious miner mines the blocks using the hashrate much faster than that of the main chain. Then at the syncing point, the malicious miner broadcasts his malicious mined block. Now the network has 2 chains, one honest and one with false transactions. But while the network has two parallel chains, the malicious miner broadcasts the next block, and all the other blocks he managed to mine. This way the malicious fork becomes the longest chain and the network may accept it as the main-chain.
This solution is proposed by Horizen. They introduced Delay time, which is the time for which the malicious node has to wait before his longest chain is accepted. Delay time is the difference between the current height of the main-chain and the current height of the proposed chain.
Based on how far a miner is when they propose a hidden block, the size of the delay penalty increases. So in a way, it multiplies the effectiveness of waiting for confirmations without forcing a network to actually wait for more confirmations. This offers a much wider opening for exchanges and other participants to respond to a 51% attack, while simultaneously drastically increasing the cost of an attack.
"Our open-source contribution enhances protection against advanced attack methods and helps improve the security of the entire industry." - Horizen Co-founder and President Rob Viglione
Also Read our Hack Attack Report about Axion, Axion Incident Report.
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