If you’ve been in the crypto world for a while, you’ve probably heard of censorship resistance. The phrase has numerous meanings. It can generally refer to the blockchain network’s decentralized character, as well as its immutability. Scroll down to learn more about censorship resistance, how it works on the Blockchain, as well as its advantages and disadvantages.
What Is Censorship Resistance?
Censorship resistance in blockchain technology refers to the typical crypto user’s capacity to make immutable and trustless transactions on a blockchain network without requiring approval from a third party. Unauthorized entities cannot edit any data kept on these decentralized public ledgers since crypto transactions only require nodes on networks enabled by cryptographic algorithms to perform.
One of the most appealing aspects of blockchain is its censorship resilience. No government, company, or a third party may regulate who can store or trade their money on the network, according to the notion. On a dispersed network, there is no one authority dictating operations.
How Censorship Resistance Works
A censorship-resistant blockchain guarantees that all transactions inside a network are protected from any interference, rendering it unchangeable. Once a transaction is completed, it is propagated to all network nodes and becomes very difficult to modify. This feature was initially offered by Bitcoin, however, it has subsequently been used by a broad range of cryptocurrency projects.
Censorship resistance is particularly beneficial in decentralized finance (DeFi) applications since traditional financial products are riddled with entrance barriers, with numerous intermediaries denying access to certain individuals and interfering with transactions. DeFi provides a censorship-resistant version of traditional banking, although at greater risk and reward.
What Is 51% Attack
A 51% attack happens when a single individual, group, or organization controls the majority of the hash rate on a blockchain, potentially causing network problems. In such a circumstance, the attacker would have sufficient mining power to remove, edit, reverse, and cause double spending concerns.
The majority rule is frequently used in the security model of blockchain. In theory, if an individual or individuals capture control of a majority share of a network’s resources (more than 50% of the network’s mining hash rate), they might gain control of the network. This is referred to as a 51% attack. In such an assault, the attackers might prevent fresh transactions from receiving confirmations while also reversing their own transactions, allowing for double-spending.
How Likely Is a 51% Attack?
A 51% attack on huge networks like Bitcoin is unlikely, but not impossible. Things are a little easier for smaller networks with lower hash rates. For example, in August 2016, Krypton and Shift, two Ethereum-based blockchains, were subjected to a 51% attack.
In May 2018, Bitcoin Gold was subjected to a 51% attack, which resulted in the attackers spending twice for several days before stealing more than $18 million in Bitcoin Gold.
The distributed structure of blockchains improves network security and lowers the likelihood of a 51% attack, particularly as the number of nodes and active participants grows.
Networks having a higher participation rate and hash rate are more resistant to attacks and data tampering. Smaller networks with lower participation are more vulnerable to 51% assaults, however, solutions such as Komodo’s delayed Proof of Work (dPoW) provide increased safety for networks of any size.
Importance Of Censorship Resistance
Blockchains, at least the major ones such as Bitcoin and Ethereum, are game changers because they return power to the people. It’s the modern-day version of the Italian protest song Bella Ciao from the nineteenth century.
The first Importance of censorship resistance is that it allows people to hold assets without the stamp of official authority. It doesn’t take long for excellent regimes to deteriorate, turn against minorities, or devolve into dictatorships. However, if people transact via blockchains, the government’s power is limited.
The second importance of censorship resistance is the protection of the concept of privacy. While blockchain ledgers are publicly accessible, there remains the prospect of perfect privacy, as proved vividly by Satoshi Nakamoto, Bitcoin’s pseudonymous founder – we know how much bitcoin he possibly possesses but has no idea who he is.
The third advantage of censorship resistance is that blockchains can never be destroyed. No government or entity, say, hackers, can bring down a blockchain as large as bitcoin until they control 51 percent of the network’s total hash rate. However, the prospect of altering the blockchain would cost tens of billions of dollars (no guarantees).
Threats Of Censorship Resistance
There are primarily two threats that can undermine blockchain censorship resistance. The first is internet accessibility, which is controlled by internet service providers and governments. Governments can disable the internet or specific websites that are required for blockchain transactions to take place.
This is a clear threat now, as evidenced by the Russian military blocking internet access in several sections of Ukraine. Elon Musk’s Starlink, which supplied internet from above the clouds, presented a straightforward answer. More of this type of technology is likely to emerge in the near future, potentially strengthening blockchains’ resistance to censorship.
Conclusion
A censorship-resistant blockchain guarantees that all transactions inside a network are protected from any interference, rendering it unchangeable. Once a transaction is completed, it is propagated to all network nodes and becomes very difficult to modify. This feature was initially offered by Bitcoin, however, it has subsequently been used by a broad range of cryptocurrency projects.
