January 27, 2020

How did BTG survive two 51% attacks?

BTG: Two 51% attacks in six hours

So what is a 51% attack? A similar situation occurs when one object or group holds most of the hash power that provides the blockchain. This position is primarily distinguished by the fact that it allows you to control the confirmation of new transactions and the ability to cancel completed transactions, which allows you to double the consumption of coins. More information about the 51% attack you can find here.

Consider what happened in more detail. 18:00 GMT on January 23, the first attack was made, as a result of which 14 blocks were removed from the blockchain and then added 13. The logical conclusion: 1900 BTG for about 19,000 dollars was spent twice for redirecting one transaction.

The second attack took place on January 24th, 6 hours after the first. As a result of this attack, 15 blocks were already deleted, and 16 were added to the WTO. 5,267 BTG ($ 53,000 at that time) was spent twice in three transactions that were redirected.

Does crime pay?

Bitcoin Gold uses the Equihash algorithm, known as Zhash, to enable mining on consumer graphics cards. Based on Nicehash’s market prices for Zhash, the estimated cost of each blockchain reorganization attack was about $ 1,700.

An attacker would recoup about the same value in the form of block rewards, which means that the attacks were at least break-even and would probably be profitable if double costs were successfully recovered from the system.

Following the attack, the price of Bitcoin Gold spiked. On January 26, the coin moved from $10.42 to $11.60 in a matter of hours. At press time, the coin is up nearly 14% on the day to trade at $11.74.

Binance increases escrow periods

At the time of the attack, major cryptocurrency exchange Binance allowed trading of BTG deposits after six confirmations, and withdrawal after 12 confirmations. A 14 or 15 block reorganization would, therefore, have evaded both of these escrow periods.

Binance has since increased its withdrawal requirement to 20 blocks, although this still does not preclude the possibility of a 51% attack being financially viable.

As reported recently, Bitcoin Gold was attacked by 51% back in May 2018, when it spent about $ 18 million BTG, which led to the exclusion of the coin from the Bittrex list.

Disclaimer

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.

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