Bitcoin Gold (BTG) has seen a malicious miner capture over 50% of its hashrate and use control of the network to double-spend over $70,000 through two deep blockchain reorganizations.
Details of the attack were shared on GitHub, where it was revealed over 7,000 BTG were double-spent over the course of two days with the malicious miner reorganizing its blockchain two times, to first double-spend $19,000 worth of BTG, and then to double-spend an additional $53,000.
Bitcoin Gold is a cryptocurrency created via a fork of the Bitcoin blockchain that uses the Equihash mining algorithm, which lets users mine BTG with their GPUs. Its creators believed that BTG would be more decentralized than BTC as it allows anyone with a GPU to mine, instead of requiring specialized ASIC machines.
As CryptoGlobe reported, in May 2018 Bitcoin Gold was hit with a 51% attack that saw malicious miners double-spend a total of $18 million. At the time, cryptocurrency exchange Bittrex asked BTG to repay it for its losses, or face being delisted. Shortly after the attack, the Bitcoin Gold network was set to undergo a hard fork that was set to prevent future 51% attacks.
The solution seems to have failed, however, as a malicious miner managed to perform a 51% attack on it once again.
Source: GitHub
Hashrate marketplace Nicehash has been blamed for the 51% attack ,as it allows users to rent hashrate from others and direct to whichever mining pool they choose. Other attacks on Verge (XVG) and Ethereum Classic (ETC) are believed to have been powered by hashrate being sold on Nicehash.
On social media, some users have started asking for a different mining algorithm on BTG, arguing ASICs may be mining the cryptocurrency without being detected. On Reddit, one user wrote:
I think it’s time we get a real leader that listens to the members of this community and take action. It is obvious that the first 51% attack was done by ASICs — Why can’t BTG be novel and create a truly new [algorithm]?
According to the Crypto51 app, which tracks the amount of hashrate necessary to pull a 51% attack on various cryptocurrencies, it would currently cost $804 per hour to attack the BTG network by controlling the majority of its hashrate. Via Nicehash, it’s possible to get control of 67% of its network.
In comparison, it would cost $675,000 per hour to attack the Bitcoin network, and less than 1% of its hashrate can be controlled via Nicehash rentals. Interestingly, CryptoCompare data shows BTG’s price rose 13% after news of the 51% attack came out.
Featured image by Aleksi Räisä on Unsplash.
