A Solution to Crypto's 51% Attack? Fine Miners Before It Happens

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One of crypto's most feared attacks may have an elegant solution.

At least, that's according to the team behind cryptocurrency project Horizen - formally zencash - which lost more than $500,000 in such an attack, called a 51 percent attack, earlier this year.

This attack happens when one single malicious miner controls more than 51 percent of the compute power on a blockchain network and can then inject false transactions into the system.

In a paper released today, the Horizen team claim to have found an innovative solution - by updating their proof-of-work consensus algorithm with a so-called "Delay function" that penalizes miners that could be preparing for such an attack.

Because a 51 percent attack requires a miner to produce blocks in secret before posting them to the blockchain, co-founder of Horizen Rob Viglione said a delay function allows for penalties that make such attacks prohibitively expensive.

Stepping back, the 51 percent attack has been a part of many crypto enthusiast's awareness this year, after five major cryptocurrencies lost money due to the attack in June.

"Right after the attack our engineers started brainstorming and we think we have a very elegant, simple solution to make sure that this doesn't happen again."

If a block is proposed that is 5 blocks or more behind the most recent, a penalty is introduced, Viglione said.

The chances of a 51 percent attack are decreased.

Accompanying the release, a white paper states that should a chain of blocks be rejected due to being too far behind the most recent block, exchanges can freeze suspicious deposits until the situation is resolved.