- $70,000 worth of Bitcoin Gold double-spent in the attack on Jan. 23 and 24
- BTG price however up over 8% since then but down 6% in the past 1 hour
Bitcoin hard fork, Bitcoin Gold (BTG) that aims to be GPU-mineable by using the Equihash algorithm also known as “Zhash” suffered a 51 attack last week.
A 51% attack is a potential attack on a blockchain network where a single entity or organization is able to control the majority, more than 50% of the hash rate of the network. Such an attack allows an attacker to modify the transactions or prevent new transactions from getting confirmations, and even reverse transactions, leading to double-spending.
According to an independent report on GitHub by James Lovejoy, a researcher at MIT’s Digital Currency Initiative, two reorgs occurred on the Bitcoin Gold network on Jan. 23 and Jan. 24. Both of these reorgs contained double-spends.
The research notes that in both cases the attacker blocks were mined with the address GWrW5dTZf5XwGWoJuqRKdzkzZFkwtWSqaP in the Coinbase transaction.
On Jan 23 at 18:01:32 GMT, 14 blocks were removed and 13 were added where 1,900 BTG worth about $19,000 were double-spent. On Jan 24, 00:24:08 GMT, 15 blocks were removed and 16 blocks were added where 5,267 BTG worth approximately $53,000 was double-spent.
Based on Nicehash market price data for Zhash, the estimated cost of generating each reorg is at around 0.2 BTC (just about $1,700).
Lovejoy also found that leading cryptocurrency exchange Binance allowed BTG deposits to be credited to one’s account for trading after six confirmations and were available for withdrawals after twelve confirmations. A fourteen or fifteen block reorg thus would have evaded both of the exchange’s escrow periods.
Since then, Binance has increased its withdrawal requirement for Bitcoin Gold to twenty confirmations.
The event, however, didn’t have any negative effect on the price, in fact, BTC price is up 8.67% in the past 24 hours trading at $11.84. But it has started to see some reds, down 6% in the past hour. BTG is also up a whopping 130% to date in 2020.
This is however not the first time that Bitcoin Gold has suffered a 51% attack. Previously in May 2018, it was hacked for $18 million, leading several exchanges to delist the coin.
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