While the "51% attack" [1] allows an adversary to control the block chain, she can only control which transactions to include and which not to include, so in the worst case bit-coin transactions can be (selectively) shut down.
Doing transactions on behalf of other users' accounts is not possible, as accounts are secured using public key cryptography (via elliptic curves) [2]. Only the creator of an account has the private key that allows her to sign valid transactions.
Nothing hinders the entity controlling the block chain to include invalid transactions that aren't properly signed, however all the other bitcoin clients in the network still verify the blockchain when downloaded, so those invalid transactions won't have a visible effect on users of the Bitcoin network.
Comments
While the "51% attack" [1] allows an adversary to control the block chain, she can only control which transactions to include and which not to include, so in the worst case bit-coin transactions can be (selectively) shut down.
Doing transactions on behalf of other users' accounts is not possible, as accounts are secured using public key cryptography (via elliptic curves) [2]. Only the creator of an account has the private key that allows her to sign valid transactions.
Nothing hinders the entity controlling the block chain to include invalid transactions that aren't properly signed, however all the other bitcoin clients in the network still verify the blockchain when downloaded, so those invalid transactions won't have a visible effect on users of the Bitcoin network.
[1] http://mineforeman.com/2012/12/10/want-to-destroy-bitcoin-i-...
[2] http://blog.ezyang.com/2011/06/the-cryptography-of-bitcoin/