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CFA Level I · CFA Level I Exam · Introduction to Digital Assets

A proof-of-work network is attacked by a party that controls a majority of the network's computing power. The most likely risk created is that the attacker could:

The most likely risk is double spending. A party with majority computing power can build a longer alternative chain and replace recent blocks, reversing its own transactions. It cannot derive other users' private keys or override protocol rules on token supply, because honest nodes would reject such blocks.

  1. Areverse its own recent transactions by building an alternative chain, enabling double spendingCorrect
  2. Bdecrypt the private keys of other participants from their public addresses
  3. Ccreate tokens beyond the protocol's fixed supply schedule without validator approval

Explanation

With majority computing power (a 51% attack), an attacker can out-build the honest chain and replace recent blocks, so it can reverse its own transactions and spend the same coins twice. Majority hash power does not break public-key cryptography, and it cannot force honest nodes to accept blocks that violate the protocol's issuance rules.

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