January 31, 2024

What Are Sybil Attacks In Crypto And How To Prevent Them

What Are Sybil Attacks In Crypto And How To Prevent Them

One of the major tenets of blockchain technology is ‘decentralization’ as blockchain is a distributed ledger that is not controlled by a centralized entity or a few individuals where transactions are validated by different nodes across the network.

This however is threatened by a “Sybil Attack”. In this attack, an individual or a group tries to take over the network by creating multiple nodes. 

Before we dive in deeper let's quickly understand what a node is. 

What Is A Node? 

Image credit: medium

Fundamentally a node is simply a device that plays a part in a larger network. 

In blockchain, a node is one of the components(mostly computer devices) that run a blockchain's algorithm to verify and authenticate each transaction. 

Nodes are devices run by stakeholders that participate in running the software of a decentralized network at various locations.

They validate transactions on the network and they are rewarded with new coins, this is called mining. 

Nodes maintain the fidelity of the data and the integrity of the network.  

Each node has its copy of the chain that gets updated as fresh blocks are confirmed and added.

Thus if someone tries to alter a record at one instance of the database, the other nodes would prevent it from happening. 

This way, no single node within the network can alter information held within it. 

If a majority of the nodes in a blockchain are controlled by a single entity the network is no longer decentralized and can be manipulated or exploited by the single entity. 

This is what happens in a “Sybil Attack” 

Understanding Sybil Attacks


Image credit: world coin 

Sybil attack is a type of security threat in which an individual or group creates multiple nodes, accounts, or devices to take control or exploit a blockchain network. 

Remember that nodes validate transactions on a blockchain and run consensus. 

In Sybil attacks, bad actors attempt to gain control over a network by creating multiple identities and using them to manipulate the network's consensus.

This affects the decentralization of a network since a single entity now has a large influence over the network. 

This high-severity security threat can be triggered by factors such as weakness in the node creation process and ineffective node validation system as once it is easy to create and run a node, malicious actors can easily set up multiple Sybil nodes and attack anytime.

Effects Of Sybil Attacks 

Here are some of the threats posed by Sybil attacks: 

Privacy Breaches

A malicious actor can run a malicious node to collect sensitive details that the honest nodes are passing and can illegally obtain the IP addresses of those behind the honest nodes. Tarnishing the anonymity status of the blockchain. 

Hijacking a Blockchain

One of the major vulnerabilities that a Sybil Attack can cause is the 51% attack. 

A 51% attack happens when a single individual or group gains total control over a blockchain. Such that the malicious nodes outnumber the honest nodes. 

This power gives the attacker the upper hand in the protocol’s decision-making processes.

As a result, the attacker can outvote or hijack such a blockchain. It is a fatal security assault that is bound to happen with a Sybil Attack. 

Block Withholding Attack

In this type of attack, the malicious actor who is now controlling a significant number of validators (nodes) acts against the blockchain’s interests and deliberately refuses to add new blocks to the chain. 

This can result in the blockchain becoming stagnant and unusable over time, requiring intervention to restore its functionality for users. 

Mining Attack 

A Sybil attacker can launch a mining attack on a blockchain network, where the malicious actor mines blocks faster than the rest of the network and gains a disproportionate and undue share of the network’s mining rewards.

Sybil Attackers Can Double-Spend Cryptocurrency

Here a malicious actor creates multiple fake identities and uses them to send the same transaction to multiple nodes on the network, allowing the attacker to spend the same coins multiple times, resulting in a double-spend transaction.

Types Of Sybil Attacks 

There are two main types of Sybil attacks they are: 

Direct Sybil Attack

A direct Sybil Attack occurs when a malicious node directly interacts with honest nodes in the protocol to manipulate the genuine nodes into taking actions that align with the attacker’s self-interests. 

Indirect Sybil Attack

In this case, the attacker uses proxy nodes as intermediaries to mask the actions of the Sybil nodes to disseminate false information and launch an indirect attack. 

Preventing Sybil Attacks 

To fight against Sybil attacks, mechanisms can be put in place that make it prohibitively expensive and/or too technically challenging for an attacker to create multiple nodes or identities.

So of the ways of preventing Sybil attacks include: 

  • Expensive Consensus Mechanism  

Proof-of-work relies on heavy computational power to solve complex mathematical problems in other to validate transactional on the blockchain the computational and energy-intensive mechanism makes it improbable to run multiple nodes to the point where a single entity will have complete dominance over the network because it is very expensive. 

The same can also be said for the Proof-of-Stake mechanism where validators have to stake their token to run nodes. 

In Ethereum which uses PoS, validators have to stake 32ETH currently worth $76,800 to run a node. This makes it very expensive to hijack the network by creating multiple nodes. 

  • Social Trust Graphs

Social trust graphs work through a comprehensive analysis of connectivity data between the nodes and classify validators based on their honesty. If the algorithm notices some foul nodes, it will indicate that their trust level is low. This way Sybil nodes can quickly be detected. 

  • Proper Identity Validation 

This can help prevent Sybil attacks, it can be direct validation which relies on a central authority to verify every new validator that applies to join the network or indirect authentication where already verified validators vouch for the legitimacy of the aspiring validators before they are allowed to run nodes. 

  • Setup a Hierarchical System

Every new node should be put on probation at least for some time until they prove their legitimacy. 

A hierarchy system where the integrity of nodes is in cadet should be created. This way those who have been in the network for a long time will have higher power than newly created nodes or identities this way new Sybil nodes can not carry out a major attack even if they want to. 

Closing Thoughts 

Blockchain is the foundation of cryptocurrencies and web3 at large. 

A threat to blockchain technology is a threat to the entire network, native coin and DApps.

As such Sybil attacks should not be taken lightly, the security/integrity of a network should be guided with state-of-the-art security mechanisms that are in line with industry best practices. 

This is why Hashlock, Australia's leading blockchain and smart contract security firm, is here.

We protect and guide protocols and network infrastructures from exploitation, conducting comprehensive audits to identify and fix loopholes and vulnerabilities. 

Contact us for all your crypto and blockchain security needs today. 

Author’s Note: This article does not represent financial advice, everything written here is strictly for educational and informational purposes. Please do your own research before investing.]

Author: Godwin Okhaifo