51% Attack
If a single entity were to acquire control of over half of the mining power on the Bitcoin network, or any blockchain network, it would gain the ability to do certain things that would not typically be possible and this poses a known security risk. While acquiring so much mining power would be very expensive, some have cautioned that because a majority of mining power may be located geographically within the borders of one country—China specifically—this poses a unique risk that should concern policymakers. So how exactly would such an attack work and how big of a risk is it? What could you actually do with a majority of the mining power on Bitcoin or any other proof-of-work cryptocurrency? Bitcoin’s blockchain is a list of all valid transactions that have been made since the network’s inception back in 2009. Anyone can update that list by adding a new block of transactions to the chain, but they have to compete and follow the rules of the protocol. The network relies on these compe