BTC Gold (BTG) reportedly succumbed to the malicious double spend attack when a miner gained 51 percent control of the network, making it the third altcoin to suffer losses from such kind of attack after Monacoin and Verge.
For those who do not know about 51% attack:
51% attack refers to an attack on a blockchain, usually bitcoin’s, for which such an attack is still hypothetical, by a group of miners controlling more than 50% of the network’s mining hashrate, or computing power. The attackers would be able to prevent new transactions from gaining confirmations, allowing them to halt payments between some or all users.
The attack on Bitcoin Gold was first discovered on May 18. After the hacker gained control of the network, they engaged in double spending, in which they sent Bitcoin Gold to various cryptocurrency exchanges and also sent the same BTG to their own wallet. It was discovered that 388,200 BTG was sent to one address since May 16.
The majority of the funds have been moved to other addresses and only roughly 12,000 BTG remains in the account.
If all of that BTG is associated with the double spending, then the attacker stole around $18.6 million USD. During the attack, the hacker was able to reverse transactions as far back as 22 blocks, which has led to some calls for increasing the confirmation requirements to 50 blocks.
The Bitcoin Gold team said,
“One of the targeted exchanges reported that they strongly believe this attacker attempted to hit them with a double-spend of BTC in the past. In their words. We are 100 percent sure that it is the same person, we found many associations between the accounts.”
Verge also recently came under a type of 51% attack and it was its second attack in a couple months. Some within the Verge community claim that it was only a DDoS attack.
Bitcoin gold is a project led by Jack Liao of Hong Kong mining firm Lightning ASIC seeking to change the proof-of-work (PoW) algorithm and promising to enable common people to mine using ubiquitous, low-cost graphics cards. It’s worth noting, however, that this accessibility means attacking the system will also be cheap, which Dr. Craig Wright, chief scientist of the nChain Group, has previously pointed out.
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