Bitcoin is secured by having all miners who are processing transactions on a network agree to a shared record called the blockchain.
A 51% attack is an attack that is 51% likely on one of those networks, when an organization gains control of that network’s mining power or hashrate and can decide which transactions to approve. This control can prevent transactions, and allow coins to be spent more than once in a process called double spending. Attacks can be attempted with less network control, but success rates will be lower. A 51% attack doesn’t take full power over the bitcoin network, and the further into the blockchain that they are, the more secured they are against an attack.
What are the consequences of a 51% attack?
Attackers can only modify transactions within the most recent blocks and cannot make new coins from nothing, they have to have been received as block mining rewards. In theory, because the network is free and open, if one has enough computational power they could take over a network, because there is no authority stopping them. However, if this type of attack did happen, confidence in bitcoin would decrease and its value as a currency would decline.
With the rise of mining pools — where groups of people mine together — these types of attacks are becoming more likely, but the damage they can cause is limited.
Is a 51% attack likely?
At current network mining difficulty levels, not even large-scale governments could easily mount a 51% attack.