Bitcoin Gold, the Bitcoin fork that experienced a 51% attack in May 2018, was hit with another attack last week which saw over 7,000 tokens being double spent. It is not yet known how successful the attempt was, given that the exchanges targeted reacted swiftly in hampering the attackers’ ability to withdraw their ill gotten gains.
Attacker Success Rate Unknown
The Bitcoin Gold attack was reported on on Github, where details on the latest attack were given. The attack, which occurred over January 23-24, was a typical 51% attack which sought to use exchanges to profit from the venture, although the post raises doubts on whether they actually did:
…it is possible that the attacks were profitable if the double-spends succeeded at defrauding the attacker’s counterparty, or break-even if the double-spends were unsuccessful. This suggests that a confirmation requirement on the order of tens of blocks for BTG is still far too few to make the budget constraint to launch an attack significant.
In response to the attack, Binance increased their BTG minimum withdrawal confirmation number to 20 in order to thwart the attackers’ efforts.
The coin was also 51% attacked back in May of 2018, where 388,000 BTG were stolen, worth $18 million at the time. This latest hack, while being vastly reduced in terms of potential reward for the hackers, demonstrates that the vulnerability still persists.
What are 51% Attack?
51% attacks occur when the majority of the mining hashrate is controlled by a single entity. They then have control over the transactions and can modify the ordering, prevent the transactions from being confirmed, or reverse them. They can also, in the Bitcoin Gold case, facilitate double spending, which is when a transaction uses the same input as another previously broadcast transaction, essentially sending the money all over again.
Many coins have been hit by 51% attacks in the past, including Bitcoin Cash, Ethereum Classic, Bitcoin SV, and Vertcoin. Preventing a 51% is more or less impossible when a hashrate is dominated by a single entity determined to carry one out. Therefore the best way to guard against it is to ensure that mining operations are sufficiently decentralized so that one party does not get so much leverage, although with smaller coins this is easier said than done.
