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The potential of 51%-attacks on small cryptocurrencies

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Over the past few months, several so-called 51%-attacks have targeted a number of smaller cryptocurrencies. A recent attack occurred on June 2 on the ZenCash network, where an unknown actor defrauded an exchange of funds worth over 700.000 USD.

 
In this article, you are going to learn about the properties of such attacks, the measures you can take to protect yourself and what Genesis Mining is doing to prevent these attacks from happening in the first place.

Understanding Transactions

In order to understand 51%-attacks, one needs to understand how transactions within the Bitcoin network and other, similar networks are processed. If Alice wants to send 1 BTC to her friend Bob, she has to broadcast a transaction to the Bitcoin network, stating, “Hey, this is Alice, I want to send 1 BTC to Bob. Signed, Alice.” — All miners in the network will then receive this information. In order for the funds to show up in Bob’s wallet, the transaction needs to be processed, or in other words, get included into the blockchain. After receiving Alice’s broadcast, every miner is going to check whether she has enough funds in her wallet to spend 1 BTC. After successfully verifying this, all miners that have received Alice’s broadcast will include her transaction into their next block.
 

As you might know, mining is a race. The first miner to find the correct solution for a hash puzzle earns the right to attach his block to the blockchain. As hash puzzles are random by design, the person to try out the largest number of different input values in the shortest amount of time is also most likely to find a correct solution first. In other words, a person controlling 1% of all processing power should statistically be the first to find a correct solution every 100th block.

The Double Spend

As there are miners spread all around the world, not all the information is available to all actors at all times. As a result, Alice could try to play the system.
 

One possibility is a so-called double spend attack. Alice could broadcast two transactions at the same time, with the first transaction sending 1 BTC to Bob and the second one sending the exact same funds to a wallet she owns herself. After doing so, she shows Bob only the transaction hash for the first broadcast, proving that she broadcasted the transaction. But different miners might receive those two transactions at different times, with each miner successfully verifying the transaction they received first and dismissing the “bad” second one – “bad” because Alice’s wallet is lacking funds to carry out the second transaction. Before the first lucky miner finds the correct solution and can attach his block to the blockchain, it is unclear whether the first or the second transaction is going to be processed.
 

Under normal conditions, simply waiting for the first confirmation by a miner usually effectively prevents this attack – after the confirmation Bob should know exactly which transaction was included and which was not.

New transaction on the block

Sometimes however, two different miners find two different solutions at the same time and both gain the right to attach their block to the existing blockchain. Now the system is in a limbo – there are two valid states of the network. The block on one end of the chain might include the first one of Alice’s broadcasts, the block on the other end of the chain the second one. Depending on their location, some miners in the network are now going to build on top of the first end and some are going to start building on top of the second end. Only after a miner attaches an additional block to either end, the situation is cleared up, as future miners will always attach their blocks to the longer end of the chain. The shorter end is abandoned and the network is going to ignore the transactions it contains.
 

This is also the reason why so many sites accepting cryptocurrencies wait for a certain number of blocks (usually between 6 and 20) before accepting funds in order to ensure they are always on the longer end of the chain. As the longest end of a chain usually contains the most transactions, it is considered the main chain. The main chain is the generally accepted version of the ledger.

The 51%-Attack

In our next scenario, Alice owns 51% of all processing power within the Bitcoin Network. Alice now sends 1 BTC to an exchange. After doing so, she waits for the mandatory 10 confirmations required by the exchange and swaps her funds for another currency. Following, Alice transfers back the funds in the new currency from the exchange to a wallet she owns.
 

Now she starts a so-called side chain by mining on top of the last block in the Bitcoin blockchain before the block that included her first transfer to the exchange. In her own version, Alice now excludes the transactions where she originally sent the money to the exchange. As Alice owns 51% of all processing power, statistically she is going to catch up at some point with the main chain. Once her end of the chain is longer, other miners are going to build on top of Alice’s chain, therefore abandoning the end including the transaction sending 1 BTC to the exchange. These funds now appear back in her own wallet and vanish from the exchange’s wallet.
 

For the most time, 51% percent attacks have been a theoretical problem. Sure, some malicious multi-billionaire could attempt to buy all available GPUs or ASICs and start attacking Bitcoin – but thanks to the sheer size of the Bitcoin network it is highly unlikely that a single miner could come even close to a relevant percentage in terms of processing power.
 

Another much more practical attack angle are mining pools. These pools concentrate large amounts of processing power and have control over what transactions are included into the blocks. However, massive opportunity costs, as well as the immediate exit of the vast majority of honest users would be deadly for any pool trying to execute such an attack. The Bitcoin community also keeps a close eye on the size of the largest pools and makes an effort to keep single pools from growing too large.

Smaller Coin, Larger Risk

While Bitcoin and Ethereum offer good protection against 51%-attacks due to the size of their networks, several smaller coins have fallen victim to successful 51%-attacks over the past few months. In order to process transactions, many smaller cryptocurrencies rely on similar hash puzzles such as Bitcoin and Ethereum do. Often, the same mining hardware used for Bitcoin or Ethereum is capable of also mining smaller coins. As a result, even a relatively insignificant miner according to Bitcoin’s standards could successfully execute a 51%-attack on a smaller network, which utilizes the same Proof-of-Work algorithm.
 

51% attacks on smaller coins are a real problem that cannot be ignored anymore. New coins need to put systems in place to make such attacks much harder to execute. Proposed mechanisms include switching partially or completely from Proof-of-Work to Proof-of-Stake, requiring more validations or closely monitoring the network with counter-measures in place. One such measure could for example be the dismissal of side-chains only including a relatively small number of transactions compared to the main chain.

Our Policy: “Be a good crypto citizen”

Genesis Mining is a big player in the mining market – and with great power comes great responsibility. While we do not publish a list of the mining pools we are using, we choose our pools on three main criteria: reliability, fee structure and reject rate. To preserve the decentralized nature of crypto networks, we are always using at least two different pools per coin, sometimes even up to four. Once a pool approaches the 50% mark, we switch to a backup pool. By combining all these measures we are aiming to preserve the original mission of Bitcoin and other cryptocurrencies – reliable and decentralized transactions.
 
 

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Bitcoin SV (BSV) Dump Awaits after Mindless Rally Gained 200% Returns

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By CCN: It took Bitcoin SV just two hours grow its market valuation from $1.09 billion to $2.478 billion.

There are no clarifications about how the world’s eleventh largest yet controversial cryptocurrency managed to attract approx $1.4 billion. The move just happened out of thin air, as if somebody with a big bag of money – or even cryptocurrencies – was waiting to click on the big buy button. As of 1315 UTC yesterday, the BSV-to-dollar exchange rate had established its all-time high at $195 on Huobi, up more than 200-percent from the market open.

bitcoin sv, craig wright, satoshi nakamoto

BITCOIN SV PRICE SURGES MORE THAN 200% IN A MINDLESS PUMP | SOURCE: COINMARKETCAP.COM

The price action surprised, partially because Bitcoin SV lately emerged as one of the cryptoverse’s most-controversial blockchain projects. The BSV creator, Dr. Craig S Wright, in April, dragged people who questioned his claims of being the bitcoin creator, Satoshi Nakamoto, to court. In a sign of protest, cryptocurrency trading firms ShapeShift, Kraken, and Binance delisted BSV, causing the price to crash by as much as 50-percent in just 20 days.

BSV had rebounded by up to 36-percent as of May 16 amidst a market-wide bullish sentiment. Nevertheless, the asset failed to overshadow its peers like bitcoin or ethereum in terms of long-term fundamentals. And suddenly, out of nowhere, it was 200-percent up on May 21.

One Foolish Fundamental, Anyway

The Bitcoin SV’s massive surge borrowed fat from a new bitcoin copyright registration filed by Dr. Wright with the US government. While such certifications are not much of a big deal, Dr. Wright’s associate, Calvin Ayer, projected it like a historic moment. The CoinGeek news portal founder said that their successful registration with the US office was proof that Dr. Craig S Wright is the real Satoshi Nakamoto.

“BSV doubled on Craig’s copyright news,” Ayre said. “This is only the start of him proving BSV is the only bitcoin. Now is a great time to convert all your other shite coins to Bitcoin.”

But the fact that Ayer overstated the truth could spoil the BSV bulls’ party. Having a copyright on the system does not entitle Dr. Wright with any exclusive rights on Bitcoin, a protocol which remains open-source under the MIT License. It loosely means, ‘you can take the code, twist it and make a new brand of it, but you can’t own the code, so eat $#!t, mate.’

It looks like big pockets artificially pumped the Bitcoin SV market to validate Ayre’s we-are-the-best rant. A 200-percent pump is seldom organic, which is why traders should restrain themselves from buying on higher highs – or even lower highs.

A Dump Incoming?

bitcoin sv, craig wright, satoshi nakamoto

BITCOIN SV DROPPED MORE THAN 50-PERCENT FROM ITS HISTORIC HIGH | SOURCE: TRADINGVIEW.COM, HUOBI

The Bitcoin SV price has corrected up to 53.09-percent upon establishing its historic high at $195 on Huobi. The hourly RSI projected BSV as an overbought asset, while the latest downside action somewhat neutralized the sentiment. Furthermore, the BSV price is now trending in what seems an unconfirmed bull flag. Intraday traders can locate a Long opportunity towards the upper trendline of the flag formation, while a Short entry towards the lower trendline upon a pullback further appears like a profitable opportunity.

The market bias is bullish at the time of this writing, with a majority of technical indicators signaling strong buying sentiment. Nevertheless, given the flawed fundamentals, a dump at this point of time should not surprise the market.

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BitTorrent Rises in the Crypto Markets as TRX Holders Continue to Receive BTT

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The first BTT airdrop through the Tron Foundation and BitTorrent Inc. used to be scheduled to distribute 1.1% of the full token provide of 990,000,000,000. This supposed a groovy 10.89 Billion BTT used to be going to be allotted directly to hodlers of TRX. Using the price of the token on the time of the airdrop, there used to be going to be an inflow of roughly 2,400 BTC value of the token within the  crypto markets.

Many buyers had put forth two eventualities for the token’s response within the crypto markets because of the airdrop. Firstly, the fast inflow of BTT from the airdrop would motive huge promoting that may dilute the price of the token. The 2nd situation used to be that crypto change and wallets accountable for the distribution, would take a while processing the entire transactions associated with the airdrop. This would then create a possibility for BTT to thrive within the markets as hobby grew from buyers.

BTT Continues to Thrive

It is the latter situation that performed out. BTT is lately valued at $0.00103 up 40% from its contemporary low of $0.0007329 witnessed at the 10th of this month. In phrases of Satoshi, BTT has risen from 20 Sats to its present price of 29 Sats within the discussed time frame.

BTT/USDT efficiency. Source, Binance.com

Delays Receiving BTT from the Airdrop

As discussed above, the distribution of 10.89 Billion BTT throughout more than one exchanges and wallets has led to a bottleneck situation the place some holders of TRX have now not won their tokens from the airdrop. Justin Sun had previous requested holders of TRX to test their wallets for the airdropped BTT. His phrases have been as follows.

We have achieved the airdrop so please take a look at your pockets&account! Really recognize the improve from #TRON and #BitTorrent group! See you within the airdrop subsequent month! The airdrop for subsequent month will quickly be launched! #TRX $TRX #BTT $BTT

However, because of more than one TRX holders expressing considerations about now not receiving their tokens, Justin has since confident that the BTT airdrop remains to be being processed and the tokens are on their method. This tweet may also be discovered beneath.

What are your ideas at the resurgence of BTT within the crypto markets? Will this momentum be repeated throughout each and every airdrop for the following 6 years? Please proportion your feedback within the segment beneath. 

Disclaimer: This article isn’t supposed to present monetary recommendation. Any further opinion herein is solely the creator’s and does now not constitute the opinion of Ethereum World News or any of its different writers. Please perform your personal analysis prior to making an investment in any of the a large number of cryptocurrencies to be had. Thank you.

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Binance Chain Testnet to Be Released For Public Testing on the 20th of February

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In a contemporary Ask-Me-Anything livestream session, the CEO of Binance, Changpeng Zhao, up to date the crypto and investor communities on several developments surrounding the change and its tasks. Of specific hobby, used to be his solution in regards to the release of the Binance Chain community.

During the livestream,  he knowledgeable that the Binance Chain testnet will transform to be had within the coming weeks. CZ has since showed this by the use of tweet by means of pointing out the general public checking out of the testnet will transform to be had at the 20th of February. The tweet making the announcement can also be discovered under.

With appreciate to the choice of validators at the Binance Chain, CZ, had this to mention throughout the livestream.

I believe for the testnet at this time we elected to run 11 check nodes. I believe any numbers is okay. The choice of validators in our community will likely be small principally for efficiency causes. So it is going to now not be as large because the Bitcoin community with hundreds of nodes. It goes to be extra like NEO…and even Ripple…smaller choice of nodes and each and every node will likely be somewhat huge.

No Smart Contracts on Binance Chain

Also throughout the Livestream, Changpeng Zhao clarified how the Binance Chain will paintings with out sensible contract capability.

In the Binance Chain, there is not any sensible contracts. We simply have an interface so that you can factor a token then you’ll business it.

Binance Chain is an easy chain relating to utility however it will possibly deal with very huge rather a lot. It is our opinion that the weight is extra necessary than options…

BNB Surpasses All-Time-High Against Bitcoin (BTC)

To now not,e is that the continuing endure marketplace remains to be in complete swing. However, Binance Coin (BNB) not too long ago reached a milestone when it accomplished a brand new All-Time-High when paired with Bitcoin. BNB exhibited a brand new height at 0.0026991 BTC in comparison to its closing All-time-high of 0.002655 BTC from June, 2018.

BNB’s new ATH. Source, Binance.com

What are your ideas at the fresh trends on the Binance change? Will 2019 be a just right yr for BNB and Binance? Please percentage your concepts within the remark phase under. 

[Image courtesy of Unsplash.com]

Disclaimer: This article isn’t intended to present monetary recommendation. Any further opinion herein is only the creator’s and does now not constitute the opinion of Ethereum World News or any of its different writers. Please perform your personal analysis earlier than making an investment in any of the a large number of cryptocurrencies to be had. Thank you.

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NEM Foundation Fights to Keep XEM Out of The Altcoin Graveyard

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The NEM Foundation has been the most recent to be afflicted by the lengthening undergo marketplace when it announced a complete restructuring on the finish of closing month. Proposals had been set forth and the basis is transferring ahead and making each effort to stay NEM from turning into some other member of the altcoin graveyard.

In a press release as of late the NEM Foundation launched a joint commentary together with NEM Labs on investment proposals and transferring ahead;

In the democratic and decentralized approach that many crypto tasks are seeking to habits their operations the NEM Foundation has referred to as for a ‘proof of importance’ (POI) vote in make stronger in opposition to a investment request. An enormous restructuring will lead to a large number of crew participants on the lookout for different jobs;

“Due to the depleted funds, a large majority of team members will be made redundant at the end of February 2019 and we will be requesting funding from the community and developers to implement a new structure.”

Proposals by means of each divisions of the group had been described as ‘complementary in nature’. The joint statement alludes to extra cooperation and collaboration between the Foundation and Labs. The final function stays the improvement and continuation of the mission which it has named Catapult. In its subsequent section, Catapult will grow to be the core NEM engine for sensible contracts and dApps. The commentary summarized;

“The reality is that the adoption of NEM is not the work of a single entity. Proven ecosystems all consist of multiple purpose driven entities that solve specific problems. We are convinced of a future where independent entities like NEM Foundation and NEM Labs solve specific problems for the NEM ecosystem in a unified approach.”

In a separate announcement previous this month NEM signed a strategic partnership with TheVault Ltd, an Artificial Intelligence (AI) powered blockchain answer for safe monetary bills and buying and selling. So regardless of the large restructuring and ‘thinning out’ of the crew issues nonetheless appear to be transferring forwards for the mission.

Unfortunately this has now not been mirrored in XEM costs that have been the crux of the issue within the first position. From a best ten crypto asset, XEM has slid down the charts as its marketplace cap dwindles. It is these days at 19th position after being flipped by means of Maker and Ethereum Classic this week.

NEM has misplaced some other p.c at the day and is these days buying and selling at $0.038. Since the start of 2019 the token has dumped 40% and issues appear to be getting worse for its value without reference to persevered efforts to stay the mission alive.

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Why Tron (TRX) Price Won’t Remain Low for Long

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TRON (TRX) has been one of the most popular cryptocurrencies in recent years. The project has achieved a tremendous amount of success in less than a year, and while the first birthday of its MainNet is approaching, TRON certainly continues to impress to this day.

With that said, its price is still noticeably low, and many would agree that the project is heavily undervalued. The low price even allowed other projects to push it out of the top 10 list, with TRX currently being the 11th largest cryptocurrency by market cap. However, it is likely that TRON will not remain undervalued forever, and that its price might soon see a surge that its entire community has been waiting for, for a long time now.

Why TRX might see growth soon

As many undoubtedly know, TRON is a lot more than just a cryptocurrency. It has developed a massive ecosystem, which offers a development platform for coins, smart contracts, and dApps. It also acquired BitTorrent last year for its Project Atlas, which will allow torrent users to earn crypto through participation in content sharing.

For this purpose, it also launched BitTorrent (BTT) token, which saw its launch on January 28, 2019 on Binance Launchpad. This was dubbed the most successful ICO in history at the time, although several coins launched since then have broken its record.

In addition, TRON also has its own DEX, and the number of its dApps is growing fast. Due to the fact that transactions within the TRON network are much faster and cheaper than on Ethereum, a lot of dApp users, as well as developers, have migrated to TRON. Because of this, the coin is now considered to be one of the potential ‘Ethereum killers,’ and it likely has a lot more potential to pull it off than any other project out there.

While Ethereum’s developers don’t appear to be too concerned about this, claiming that ETH’s focus was, is, and always will be on smart contracts — TRON itself approaches its 1000th smart contract at a rapid pace. It already managed to break several records regarding transaction volumes, beating Ethereum in this area as well.

In other words, TRON is popular, useful, and apparently, loved by the community. It also made some strong partners and gained influential supporters along the way. The largest crypto exchange by market cap, Binance, for example, announced its support for TRX and BTT earlier this year. Not only that but one of the most popular browsers around the world, Opera, recently teamed up with TRON and added TRX to its list of supported coins.

Of course, TRON had some issues along the way, such as the recent decision of its co-founder and CTO to leave and even threaten to sue TRON CEO, Justin Sun. However, there is a lot more good, positive achievements than negatives, and the project has mostly managed to avoid major scandals.

Even so, its massive total supply of 99 billion, as well as its circulating supply of 66 billion prevent the coin from achieving great prices. But, that is fine, as one of its goals is to make microtransactions quick and easy. However, that does not mean that TRX price will remain where it is forever. Even now, TRON is seeing gains, rising by 5.06% against the USD. Further, it is also performing well against BTC, rising by 3.70% in the last 24 hours.

While its price recently dropped below a major level at $0.030, it appears to be well on its way back, and many are investing in the coin now, while it is at a ‘discount.’ Additionally, Justin Sun recently predicted that TRON will climb back to the top 10 list within a month and that BTT will surpass around 20 other currencies during the same period. While it is unknown if this is just hype-building or if Sun knows something that others do not, but TRON network’s coins do have a way of achieving much in a very short period.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Photo by Sebastian Voortman from Pexels

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