Blockchain double spending attack on Bitcoin Gold

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Bitcoin Gold (BTG) is subject to a blockchain double spending attack worth around $72,000 as a result of a 51 percent mining attack to take control of the Bitcoin Gold blockchain.

The attacks came on Thursday and Friday, dated 23rd and 24th of January, where the first attack costed the blockchain around 1900 BTG, and the second attack wave costed a loss of 5267 BTG. A 51 percent attack occurs when a hacker or a group of hackers try to take control of the 51% nodes in any specific blockchain.

James Lovejoy explains that attackers must have spent around $1200 to perform each of the consecutive attacks. Lovejoy bases his estimates as per the NiceHash marketplace pricing for the Bitcoin Gold hash rate.

This incident has been collectively recorded as a dual attack that marks the marked the second and third time Bitcoin gold has suffered in the last two years.

Cryptocurrency exchanges targeted by double spenders:

Any blockchain version with updated entries can only be processed and accepted by the blockchain if the entity in control has over 51 percent of the total hashrate.

A version of blockchain which is either accepted or rejected by the network is decided by the group or entity that controls 51 percentage of blockchain’s hash rate moreover.

These events will favor the double spending attacks on the BTG blockchain, whereas the percentage of blockchain hashrate required varies from blockchain to blockchain.

Any transaction with an intention to re-organizing the blockchain by rapidly revising it to spend the same cryptocurrency twice is dubbed a double-spend attack.

What happens in a Blockchain double spending?

Double spending would cause the cryptocurrency funds to be distributed twice on the network. Spending occurs once in an original transaction and the second time when the blockchain is re-organized.

The original transaction is accepted by a third party while the network generates another transaction of the same third-party accepting the original transaction and network returning the cryptocurrency used by the attacker; this allows their funds to be used twice.

Lovejoy explains that a six-block deep blockchain transaction is recorded as a legitimate one, which is practically six levels of confirmation on the blockchain.

Each block confirms the transaction and forwards it to the next one for further confirmation. Whereas in the current attacks, the confirmations were found 15 blocks deep, bypassing the Binance escrow limit of 12 confirmations.

Whereas, he also demonstrated that Binance had increased its Bitcoin Gold (BTG) requirement for withdrawals to 20 confirmations to avoid blockchain double spending. There was no public response from the exchange so far.

Previously, cryptocurrency exchange Bittrex delisted BTG owing to a previous 51 percent attack that managed to double-spend cryptocurrency worth over 18 million United States dollars.

Featured Image by Pixabay

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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