Thumbnail Pepecoin The Meme Coin Craze Thats Making Waves in the Crypto World

Thumbnail Pepecoin The Meme Coin Craze Thats Making Waves in the Crypto World

In the ever-evolving world of cryptocurrencies, a new contender has leaped onto the scene, capturing the attention of investors and enthusiasts alike.

Meet Pepecoin, a meme coin that has experienced a meteoric rise in value, leaving many wondering whether this little frog can hop its way to long-term success or if it’s just another fleeting fad.

Let’s dive into the world of meme coins and unravel the mystery behind Pepecoin’s bewildering rise.

Infographic Pepecoin The Meme Coin Craze


What are Meme Coins?

Meme coins are cryptocurrencies characterized by their comical, animated imagery, and enthusiastic online trading communities.

These highly risky investments often have little or no intrinsic value and are predominantly trading instruments, rather than utility currencies.

Examples include Dogecoin, Shiba Inu, Baby Doge, and Dogelon Mars.

Major cryptocurrencies like Bitcoin and Ethereum are not considered meme coins.

Meme coins are notorious for their high volatility, with only a few, such as Dogecoin and Shiba Inu, boasting daily trading volumes exceeding $1 million.

What is Pepecoin?

Pepecoin is a meme-based cryptocurrency that draws inspiration from the popular Pepe the Frog meme.

Although it uses the likeness of the character, there is no official connection to Matt Furie, the original cartoon artist behind Pepe the Frog.

Pepecoin has a maximum supply of 420,690,000,000,000 coins and has already made its way into the top 50 largest cryptocurrencies.

The trading volume experienced a massive 425% increase on Friday following its listing in Binance’s “innovation zone.”

With a market cap exceeding $1 billion, Pepecoin is making a significant impact on the crypto landscape.

However, concerns regarding potential rug pulls remain, as whales hold large quantities of the currency, making the market susceptible to manipulation.

Why the Sudden Jump in Price?

Several factors contributed to Pepecoin’s impressive price increase.

One of the primary reasons is the end of the so-called “crypto winter,” which has led to a resurgence in the popularity of meme coins.

Pepecoin has capitalized on this trend, seeing its value skyrocket by 500% in a mere two-week span.

Additionally, its inclusion in Binance’s “innovation zone” has provided a level of mainstream validation, further boosting its appeal among cryptocurrency traders.

This combination of factors has led to an astonishing 1,503.9% surge in Pepecoin’s value within just 14 days, illustrating the power of social media and community-driven enthusiasm in the rapidly evolving world of meme coins.

The Crash of Pepecoin

The volatile and uncertain world of meme coins was recently put on display when Pepecoin experienced a drastic price drop of more than 42% shortly after achieving its all-time high on May 6th.

This sharp decline serves as a reminder of the high-risk nature associated with these types of cryptocurrencies, which often lack intrinsic value or utility.

This sudden drop in value had a significant impact on a crypto “whale” who had acquired a massive 962.3 billion Pepe tokens just days before the plunge.

As a result, this investor was left with an unrealized loss of approximately $600,000, showcasing the potential for considerable financial setbacks when dealing with meme coins.

In spite of the substantial price decline, Pepecoin managed to hold onto a market capitalization of over $1 billion.

This achievement positioned it as the 45th largest cryptocurrency by overall valuation, indicating that even with the inherent risks, meme coins can still generate considerable interest and market presence.

Is Pepecoin a Good Investment?

As with any investment, especially in the volatile world of cryptocurrencies, there are no guarantees.

While Pepecoin has seen impressive growth, meme coins have historically struggled to hold their value.

Investors should be cautious, as some characterize meme coins as pump-and-dump schemes.

Additionally, concerns about concentrated ownership and insider trading add to the potential risks of investing in Pepecoin.

As more individual holders join the fray, it’s essential to remember that investing in meme coins, such as Pepecoin and Dogecoin, can be an incredibly risky strategy due to their lack of fundamentals and extreme price volatility.

Concluding Thoughts

Pepecoin’s astronomical rise has undoubtedly captured the attention of the cryptocurrency community, but its long-term success remains uncertain.

While meme coins can offer high rewards, they also come with significant risks, making it essential for investors to tread carefully in this unpredictable landscape.

As you consider investing in meme coins like Pepecoin, ask yourself:

Are you prepared for the potential volatility and risks associated with these investments?

And, given the concerns surrounding concentrated ownership, how can you ensure you’re making well-informed decisions in the world of meme coins?

Let me know in the comments below!


thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail Rise and Fall of FTX

Thumbnail Rise and Fall of FTX

Are you ready to learn the truth about what really happened to FTX exchange and its founder, Sam Bankman-Fried?

Because it’s a wild ride.

In December 2022, Bankman-Fried was arrested on fraud charges by Bahamian authorities, and the collapse of FTX sent shockwaves through the cryptocurrency market.

The value of cryptocurrencies dropped billions of dollars and even fell below the $1 trillion mark in November 2022.

The impact of FTX’s decline will likely be felt for a long time and could potentially even affect broader markets.

Investors and customers have lost billions, and according to John Ray, the company’s replacement CEO, not all of it will be recovered.

In this blog post, I’ll going to cover the rise and fall of FTX and the FTT token, and whether investors are likely to get their money back.


What is FTX?

Firstly, what is FTX?

It’s a cryptocurrency exchange that was founded by Sam Bankman-Fried, who is the main villain in this saga.

A cryptocurrency exchange is a platform that allows individuals to buy, sell, or trade cryptocurrencies for other assets, such as traditional fiat money or other digital currencies.

These exchanges serve as the primary way that people buy and sell cryptocurrencies, and they provide a marketplace for traders to buy and sell cryptocurrency with each other.

Some exchanges only allow users to trade specific pairs of cryptocurrencies, while others offer a wider range of options.

Some exchanges are designed for professional traders, while others are more geared towards novice users.

What is the FTT token?

What is the FTT token and what does it have to do with FTX?

It’s a cryptocurrency issued by FTX, and FTT is the native token of FTX and was used on the platform for various purposes, like paying for things and accessing special features for traders.

The value of FTT was closely tied to FTX’s performance and reputation, so it experienced big price fluctuations.

The Rise of FTX

How did FTX grow so quickly?

The company was known for its aggressive marketing tactics, including a Super Bowl ad campaign and the purchase of naming rights to the home of the Miami Heat basketball team.

FTX was also involved in political lobbying and made donations to various causes, as well as working to support the overall cryptocurrency industry.

In addition, the cryptocurrency market has been volatile and has experienced significant growth in recent years, which may have contributed to the rapid rise of FTX.

The Fall of FTX

In November 2022, FTX filed for Chapter 11 bankruptcy protection after seeing its valuation plummet from $32 billion to nearly nothing in just a few days.

This also resulted in a significant reduction in Bankman-Fried’s net worth, which was previously estimated at $16 billion.

Right now, Bankman-Fried is being held in jail without bail and is fighting extradition to the U.S., where the case against him has been described as one of the largest financial frauds in American history.

Bankman-Fried claims to have around $100,000 in his bank account as of November 2022.

A class-action lawsuit was filed in Florida that same month, accusing Bankman-Fried of creating a fraudulent cryptocurrency scheme that targeted unsophisticated investors across the U.S., with celebrities including Steph Curry, Shaquille O’Neal, Shohei Ohtani, Naomi Osaka, Larry David, and Kevin O’Leary named as alleged accomplices.

Bankman-Fried has hired white-collar crime lawyer Mark S. Cohen to defend him, while Caroline Ellison, head of the FTX-affiliated Alameda Research, has retained the services of law firm Wilmer Cutler Pickering Hale and Dorr.

But it’s not just the legal issues that are causing problems for FTX.

Shady Practices of FTX

The company has been accused of questionable practices, including undisclosed leverage and the manipulation of cryptocurrency prices.

There have also been allegations of insider trading and self-dealing.

As the situation at FTX continued to develop, it became clear that the company had engaged in questionable practices, including the use of undisclosed leverage and the manipulation of the prices of certain cryptocurrencies.

These practices contributed to the rapid decline of the company and the loss of billions of dollars for investors and customers.

The Crash of FTT Tokens

In response to the situation, major cryptocurrency exchange Binance announced in November 2022 that it would sell its entire position in FTT tokens, which was valued at around $529 million.

Binance CEO Changpeng Zhao stated that the decision to liquidate the exchange’s FTT holdings was made to protect the interests of its users and the wider cryptocurrency community.

Following the announcement, the value of FTT tokens plummeted, causing further damage to the already troubled FTX.

Will Investors Get their Money Back?

In December 2022, FTX and its affiliated debtors filed a motion with the bankruptcy court seeking approval for the sale of four businesses, including Embed, LedgerX, FTX Japan, and FTX Europe.

The motion stated that the sale of these businesses was intended to raise funds to pay off FTX’s debts and to provide a return to its creditors.

As the situation at FTX unfolded, it had significant reputational consequences as well.

Bankman-Fried had been seen as a leading figure in the cryptocurrency industry, but the allegations against him and the collapse of FTX have tarnished his reputation and that of the company.

It remains to be seen how these events will impact the overall cryptocurrency market and the future of FTX and its affiliated companies.

Concluding Thoughts

So, what can we learn from all of this?

It’s a cautionary tale about the risks of investing in the cryptocurrency market, and it’s a reminder to always do your due diligence before putting your money into any investment.

The situation at FTX is still unfolding, and it remains to be seen how these events will impact the overall cryptocurrency market and the future of FTX and its affiliated companies.

But one thing is certain: this is going to be very bearish for the crypto market, and there are likely more companies that are going to get dragged down as more disclosures come to light.

And as for investors, the likelihood of recovering the full sum is very slim, but there is a good chance of getting at least something back.

Now that you know all about FTX and FTT, do you think this fiasco could have been avoided if more due diligence was done?

Were you one of the unlucky ones who got their money trapped in FTX?

Let me know in the comments below.


thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What is Avalanche AVAX cryptocurrency and is it a good investment


Avalanche (AVAX) has been touted a potential Ethereum-killer, meaning it has the potential to outperform and replace Ethereum as the dominant smart contract token.

This token aims to change the way people send money around the world by providing both speed and security that other cryptocurrencies don’t have.

Avalanche has been around for a much shorter period of time compared to Bitcoin and Ethereum, but it already has millions of users across the world.

In addition, it is highly secure, fast, and easily scalable.

But will it be good enough to emerge the winner?

In this blog post, I’m going to cover everything you need to know about Avalanche, including how it works, why it’s so popular, and whether or not it’s worth investing in right now.


Infographic What is Avalanche AVAX stablecoin and is it a good investment


What is Avalanche (AVAX)?

Avalanche is basically a next-generation blockchain platform that enables rapid and secure transactions.

The platform is based on a unique consensus algorithm that allows for the instant finality of transactions.

The project has a team of experienced developers, computer scientists, and business professionals that are aiming to bring blockchain technology into the mainstream by creating an easy-to-use platform that anyone can use.

How Does Avalanche (AVAX) Work?

The project was built on the Ethereum blockchain and uses the ERC-20 token standard.

This means that all transactions are recorded on the public ledger and are freely available for anyone to view.

You can use AVAX (the native token of the Avalanche platform) to send or receive payments or to mine various cryptocurrencies.

There are two ways you can use AVAX tokens: You can send them in transactions with other users, or you can use them to mine various cryptocurrencies.

Users will be able to purchase AVAX tokens through a variety of methods, including credit cards, bank transfers, and cryptocurrency wallets.

What Makes Avalanche (AVAX) Different?

Avalanche is a cryptocurrency that is different from other cryptocurrencies in several ways.

1. High Scalability

AVAX is designed to be more scalable than other cryptocurrencies.

It can handle a larger volume of transactions compared to other cryptocurrencies, and it can also support a much larger number of users.

Furthermore, Avalanche is more decentralized than other forms of cryptocurrencies.

The transaction speed on Avalanche is much faster than mainstream cryptocurrencies like bitcoin, which means that you can send money instantly without having to wait for confirmations.

2. New Consensus Algorithmn

It uses a new consensus algorithm called Avalanche that is different from the proof-of-work algorithm used by Bitcoin and Ethereum.

The idea behind Avalanche is to come up with a way for nodes to reach a consensus on transactions without having to rely on expensive computations like those required by proof-of-work algorithms.

3. Built-in Governance System

Avalanche has a built-in governance system that allows users to vote on proposals to improve the network.

This means that developers can implement changes by changing how nodes validate transactions without having to hard fork.

4. Built-in Privacy

It also has a built-in mechanism for privacy.

This built-in mechanism helps to protect the identities of users and prevent censorship by governments or other entities.

In addition, Avalanche is compatible with Ethereum’s ERC-20 token standard, meaning that it can be simply continued as a base layer for other applications to build on.

5. Proof of Capacity

Finally, Avalanche is built on “Proof of Capacity” instead of “Proof of Work.”

This means that miners don’t have to use expensive, power-hungry computers to verify transactions, which makes it quick for anyone with a computer to be able to participate in the network.

In addition, Avalanche uses a “delegated proof of stake” consensus mechanism, which means that token holders can vote for delegates to maintain the network.

Reasons to Invest in Avalanche (AVAX)

Avalanche is a cryptocurrency that was created in 2020 and is well-known among investors.

Even though it is relatively new compared to Ethereum and Bitcoin, it has managed to grow to a large market cap within a short period of time.

So, let’s check out the reasons why investors think it is a good choice:

1. Smart Contracts

One important reason is its support for smart contracts, which allows developers to create applications on top of the Avalanche platform.

So, this means that Avalanche has a huge potential for growth.

In addition, it is also capable of creating decentralized applications (DApps) on top of the Avalanche platform, which opens up many possibilities for developers to build and deploy their own DApps.

2. High Liquidity & Security

Next to all of this, Avalanche is also a great investment option because it offers high liquidity.

This means that you can easily convert your tokens into cash whenever you want to sell them or transfer them to another wallet.

Furthermore, Avalanche also offers a lot of security.

This is because it uses blockchain technology to store all data, which makes it hard for hackers to access your information and steal your funds.

3. Easy to Use & Scale

Another advantage of the Avalanche platform is that it’s easy to use.

This means that developers can build DApps on top of the Avalanche blockchain without any need of technical knowledge about coding or software development.

This will make it more accessible for a wider range of people and companies to create and use their own DApps.

In addition, the Avalanche platform is also easy to scale, which means that it can compass a high transaction volume without slowing down or crashing.

4. Proof of Stake

Finally, the Avalanche consensus protocol is secure.

It uses a proof-of-stake model, which means that the Avalanche network depends on its users to verify the transactions and add new blocks to the blockchain.

As long as you have some tokens in your wallet, you can help maintain this network by staking them and earning more coins in return.

How to Buy & Store Avalanche (AVAX)?

Here’s a quick summary on how to buy and store cryptocurrencies safely:

  • Choose a reputable cryptocurrency exchange that supports AVAX, like Binance or Coinbase.
  • Open an account with the crypto brokerage.
  • Deposit fiat currency into your exchange account.
  • Buy needed AVAX with your fiat currency.
  • Store AVAX in a secure and offline wallet.

The Future of Avalanche (AVAX)

AVAX is a good potential long-term play because the company has a strong team and is making significant strides in its development plans.

In. addition, the AVAX token has a lot of potential.

As the company focuses on its technology, it will need to expand its user base and increase the adoption of the platform.

The more people who use it, the higher demand there will be for AVAX tokens.

Furthermore, the company plans to integrate its technology into other areas, such as e-commerce and biometrics.

If it succeeds in these pursuits, the demand for AVAX tokens could increase dramatically.

Concluding Thoughts

Overall, Avalanche (AVAX) is a very promising company that is well-positioned to capitalize on the growing demand for cybersecurity solutions.

It has a strong team and an impressive list of partners, which will help drive the adoption of its technology and increase the value of its token in the long term.

So, if you’re looking for a cryptocurrency that has a lot of potentials and could be an excellent investment for the long term, then AVAX is definitely one to consider.

Now that you know all about the Avalanche (AVAX) token, would you consider investing in it?

Do you think it has the potential to emerge as the dominant token for smart contracts?

Let me know in the comments below.


thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What is Tether USDT and is it a good investment

Entering the world of cryptocurrencies is like stepping into a new dimension, with products such as stablecoins, NFTs, DeFi, Bitcoin, and many more coming out every single day.

It’s hard to keep up with everything, even for the most experienced traders. That’s why it’s important to know what you’re doing and where you’re headed before jumping in.

One of the most interesting but underrated products on the market today is stablecoins.

For those who don’t know, a stablecoin is a cryptocurrency that is pegged to an asset with a stable value.

The most popular and well-known stablecoin is Tether (USDT).

In this blog post, I’m going to cover the basics of stablecoins, before going in depth on what Tether (USDT) is, how it works, and whether or not it is a good investment.


Infographic What is Tether USDT stablecoin and is it a good investment


What is a Stablecoin?

A stablecoin is simply a digital asset that is pegged to a stable asset, such as the U.S. dollar.

The main advantage of a stablecoin is that it allows traders to avoid the volatility of the crypto markets while still enjoying the benefits of blockchain technology.

Also, with stablecoins, you can be sure that the value of your money will not fluctuate.

Why are Stablecoins Useful?

Stability is one of the essential features of any currency.

If a currency’s value fluctuates too much, it is impossible to use it in everyday life.

Stablecoins are pegged to an asset that is highly stable and unlikely to experience rapid changes in price over short periods.

Their stability makes them useful as a holding currency for saving, investment and transactions.

Now that you are armed with the right information about stablecoins, let’s move on to Tether (USDT).

What is Tether (USDT)?

Tether is a digital currency introduced by Bitfinex, a cryptocurrency exchange platform.

It is a tether-based stablecoin pegged to the U.S. dollar.

In simple words, one USDT is equal to one U.S. Dollar.

This means that if you have one Tether coin, then its value will remain the same, and you can use it as a substitute for USD currency.

The main function of Tether is to provide a stable alternative to traditional cryptocurrencies, which tend to be more volatile.

This helps  protect you from market volatility, so if you are worried about the security of your funds, then you can use Tether as a safe haven to hold your funds.

How Does Tether (USDT) Work?

Tether (USDT) works in the same way as other cryptocurrencies do.

You can transfer your Tether coins to another person or use them to purchase goods or services.

You can also store your USDT in a digital wallet, which is similar to a bank account.

As with other cryptocurrencies, all transactions for USDT are recorded on the blockchain and cannot be counterfeited.

Furthermore, the company behind Tether guarantees that every USDT is backed by a U.S. dollar held in reserve.

This means you can always redeem it for the cash value of the currency.

If you want to convert your USDT back into fiat, all you need to do is contact customer support and request a refund.

Reasons for Investing in Tether (USDT)

As we all know, Tether is one of the most popular stablecoins on the market.

It offers investors a secure alternative to volatile cryptocurrency investments while also providing opportunities for arbitrage and hedging.

Here are some of the smart key reasons why you should invest in Tether:

1. High Stability

Tether is a highly stable coin, so you know what you’re getting in terms of value.

It doesn’t fluctuate much and can be used for a variety of purposes, including as an investment, a store of value, or simply as a means to pay for goods and services online.

This makes it a go-about choice for those who want to protect their wealth from market volatility while still having access to the benefits of blockchain technology.

2. Transparent

Tether is very transparent in its accounts and reserves, and it has audited financials provided by Tether Limited.

No doubt Tether is one of the most transparent cryptocurrencies on the market today.

The company provides an audit report that details how much USDT there is in circulation and where it came from, which means you can rest assured your money isn’t being used for anything unethical.

3. Liquidity

The next most important thing to look for when choosing a stablecoin is liquidity.

When you want to convert USD into Tether, and Tether back into USD, it should be easy and quick.

You don’t want to have to wait days or weeks for your money!

Tether has maintained high levels of liquidity since its inception in 2014, which means you can be confident that you’ll be able to cash out of USDT whenever you need it.

4. Accepted on Many Exchanges

Many exchanges accept Tether, so it’s easy to trade with other cryptocurrencies.

Tether is the most widely accepted stablecoin in the world.

Many exchanges accept Tether as a way to deposit funds, so if you want to buy other cryptocurrencies like Bitcoin or Ethereum, you can deposit USDT into your brokerage account, then use that to buy other cryptocurrencies.

5. Security

Tether is 100% transparent, which means that you can see all of the transactions on their website.

This is paramount because it makes it easy for people to know how much money there is in circulation and how many tethers are being held by each exchange.

6. Reliable

Tether is a reliable cryptocurrency because it’s one of the most stable in the market.

It doesn’t fluctuate like other cryptocurrencies, which makes it great for people who want to make long-term investments or get stable yields via yield-farming, but also want to preserve the capital.

7. Decentralized

Tether is decentralized, which means that there is no central authority controlling its supply or price.

This makes it easier for anyone to use cryptocurrency without having to worry about regulations or restrictions from governments.

8. Quick and Easy

Tether is very easy to use because it can be used just like fiat currency.

Anyone who wants to buy Tether will only need a wallet and an internet connection; this makes it more convenient than other cryptocurrencies that require complicated mining procedures.


Risks of Investing in Tether (USDT)

Just with any stablecoin, there are risk associated with investing in USDT.

One of the main risk for cryptocurrencies is always the risk of getting hacked, but so far Tether (USDT) has been safe in this aspect, with no major hacking incidents related to the blockchain.

The other major risk for stablecoins is the risk of depegging, since the token is pegged to the US Dollar.

If depegging occurs, like what happened to Terra USD (UST), then the token can rapidly spiral to zero.

However, Tether has a healthy reserve to defend the peg, and the price has not deviated significantly from the peg before, so this risk is not too high as well.

How to Buy Tether (USDT)?

To buy Tether, you will need to register an account on an exchange that supports USDT, such as Bitfinex, Binance, or Huobi.

Once you have your exchange account set up and verified, you will be able to purchase Tether with either fiat currency or another cryptocurrency.

For more information about brokerages, you can check out our list of tools & resources.

The Future of Tether (USDT)

Tether, or USDT for short, is issued on the Omni Layer, a blockchain platform that is compatible with multiple cryptocurrencies, including Bitcoin, Litecoin, and Ethereum.

Each USDT unit you go for is backed by one U.S. dollar held in reserve by Tether Limited.

And with its recent expansion into Ethereum and other blockchain platforms, Tether’s future looks bright.

Concluding Thoughts

Tether is currently the go-to option for many people looking to use stablecoins, as it’s an ideal way to store your hard-earned money without having to worry about it losing value.

Furthermore, the fact that it’s backed by USD makes it a more stable option than other cryptocurrencies.

However, if you are looking for higher yields on stablecoins, then there are other stablecoins which offer higher yields, but also come with higher risk.

So in a sense, Tether (USDT) is like the blue-chip of stablecoins in the crypto universe.

Now that you know all about stablecoins and Tether (USDT), do you think they are good investments?

What do you think are some good strategies to profit from stablecoins such as USDT?

Let me know in the comments below.


thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”

Thumbnail What is a Crypto Blockchain 51 Attack

In theory, any miner can choose to conduct a 51% attack on the network, where they control over 50% of the entire blockchain’s mining power and use it to alter transactions in their favor.

How is this possible?

Blockchain technology has made its mark on the world as one of the major technological advancements of our time, with one of its most famous applications being the decentralized cryptocurrency, Bitcoin.

While blockchain has already revolutionized how people exchange money, we are still just scratching the surface when it comes to what this technology can do.

Blockchain works because it is decentralized — no single entity controls the ledger.

But because of this, blockchain is also more vulnerable to attack than centralized ledgers are.

In this blog post, I will explain everything you need to know about a 51% attack on blockchain, what its impact is, and how it can be prevented.

Let’s jump right into it!

Infographic Crypto Blockchain 51 Attack


What is a 51% Attack?

A 51% attack occurs when a malicious user in a blockchain network gains the ability to control more than 50% of a given blockchain’s computational power, which lets them mine faster than everyone else on the network.

This gives them an advantage because they can alter data or stop transaction confirmations without having to get any consensus from other users on the network.

Depending on the mining power of the attacker, a 51% attack can often bypass the network’s security protocols.

While blockchains are generally secure, they are not perfect.

For instance, there is no way to guarantee that all of a blockchain’s participants are honest and will not manipulate transactions or data.

With Bitcoin, miners are in charge of adding new blocks to its blockchain and validating transactions.

Because they decide which transactions to validate, they can choose not to include some that their users want validated if it helps them get ahead.

But this isn’t a problem with most cryptocurrencies, including Bitcoin and Ethereum, because the computing power needed to attack such a huge established blockchain would be impossibly large.

We only see this type of behavior during so-called penny wars.

These occur when small players try to game the system by spamming large numbers of unimportant transactions to push up the price paid per kilobyte (KB) for mining these low-value transactions.

To combat such attacks, most blockchains also have built-in features and hard fork protocols that enforce changes in their system if necessary.

What is the Impact of a 51% Attack?

If miners get too much hash rate and collectively control more than 50%, they can theoretically form their own consensus and run a different version of the network history, allowing them to spend their money twice and double-spending other people’s transactions.

They would also be able to redirect any transactions they see as undesired by broadcasting one transaction but mining another block.

All these changes could impact end users because they allow an entity with majority mining power to manipulate the blockchain and its rules in ways incompatible with end-user expectations.

This kind of attack is why some people advocate for Segregated Witness (SegWit) or Lightning Network to handle Bitcoin transactions instead of on-chain transactions, as there would not be any need for a lot of hashing power to execute these types of transactions.

A 51% Attack Can Cause Network Disruption

One of the primary Blockchain protocols is referred to as Proof-of-work (PoW), which is used by Bitcoin, Ethereum, and other popular networks.

The PoW protocol essentially maintains that every 10 minutes, there will be new blocks added to a blockchain’s ledger.

For someone in a network to add new blocks to that blockchain, they must guess complex mathematical equations, which are nearly impossible to calculate if you don’t have access to high computing power.

However, in a 51% attack, the attacker can disrupt the entire network by interfering with unconfirmed blocks and transactions.

Cryptocurrency users might lose digital assets or cash due to a 51% attack.

This raises serious concerns about blockchain’s reliability and security among its users and miners.

Is the Damage Permanent?

It is important to note that while these types of malicious actors might be able to disrupt a blockchain and invalidate recent transactions temporarily, they do not necessarily have access to modify past transactions.

So even though it may seem like your money has disappeared forever during one of these attacks, rest assured that it won’t stay gone forever.

For example, if someone transferred Bitcoin to another individual or merchant, it would not be possible for an attacker to reverse that transaction.

They could still prevent future transactions from going through and might even be able to access your funds, but these are two different things entirely.

Once these attacks have ended, you will regain access to your funds.

How Different Is It from a 34% Attack?

A 34% attack is one where an attacker can control most of the network’s mining power, but does not have enough to control more than 50%.

In this instance, the attacker could alter the blockchain’s ledger.

The consequences of a 51% attack are far more severe.

A 51% attack would not stop transactions from happening, but it could severely disrupt blockchain’s peer-to-peer model and open doors for double-spending.

With more than half of all computing power available to an attacker, they could create multiple versions of their own chain to outpace that of a blockchain’s main network.

51% Attacks in Recent Times

a) Grin:

Grin, a blockchain cryptocurrency focused on preserving the privacy of its users, was the currency on the attack where an unknown miner took up 57% of the Grin hash power.

What the attacker intended is still a mystery.

Grin was forced to shut off payouts and urged miners to stop until the issue was fixed.

Grin later re-established the network and added additional measures to prevent the attack from recurring.

b) Vertcoin:

The cryptocurrency Vertcoin has been attacked several times over the past few years.

In one such attack, the attackers wrote their own blocks in place of the Vertcoin genuine blocks.

Vertcoin switched from the original blockchain to a new, more robust PoW system to keep attackers from double spending and getting their hands on users’ hard-earned money.

Moreover, it had to cut off powerful mining chips to keep its mining more community-based.

c) Bitcoin Gold:

Compared to other Bitcoin forks such as SHA-256, Bitcoin Gold (BTG) implements the Equihash consensus algorithm.

The developers intended to achieve decentralization by using GPU mining instead of ASICs.

However, an unknown miner managed to gain access to more than 51% of the overall BTG hash rate in 2018, resulting in heavy losses for the network.

Another 51% attack on BTG occurred in 2020, and the network experienced two reorganizations in two days.

An enormous amount of money was double spent.

There was a suspicion that the BTG network had ASIC mining devices that might have been hidden from the community.

The community then urged the blockchain to implement a more secure algorithm.

d) Ethereum Classic:

In 2020, the ETC blockchain was attacked three times in the same month.

ETC relies on the decentralized proof-of-work (PoW) consensus algorithm, just like Bitcoin, which makes it challenging to avoid or mitigate 51% attacks.

Though these attacks did not significantly affect ETC prices, they reduced users’ trust in the network.

Can a 51% Attack Be Prevented?

Although blockchain is a decentralized database, it is not immune to hacking.

The best way to protect against a 51% attack is to limit the amount of hashing power that any single miner has to 50%.

So no person or organization can control more than 50% of the total network’s mining power.

Another way to prevent a 51% attack is using the Proof of Stake (PoS) consensus mechanism.

PoS makes it more difficult for validators (not miners) to produce blocks and act maliciously because they don’t have an incentive to do so.

Instead, the validator’s stakes are at stake — their investment in the cryptocurrency.

For them to abuse their power, they would have to forfeit their entire stake.

The higher the stakes, the more difficult it becomes for them to act maliciously.

Concluding Thoughts

When blockchain was first introduced, it caused quite a buzz in the financial sector.

Because of its decentralized, trustless nature, this technology has captured everyone’s attention and promises to have a far-reaching impact on many aspects of everyday life.

However, blockchain isn’t infallible, and like any other technology, it has its vulnerabilities and risks that users should be aware of, such as the 51% attack and 34% attack.

Now that I have covered all you need to know about a crypto blockchain 51% attack, are you able to tell which new tokens are at risk of such attacks?

Do you think the upcoming new security protocols will be able to stop such attacks in future?

Let me know in the comments below.


thumbnail the ultimate guide to blockchain and crypto assets

If you would like to learn more about crypto & DeFi, also check out: “The Ultimate Guide to Blockchain & Cryptocurrencies”