Bitcoin Gold Was 51% Attacked, BTG Market Completely Ignores It
- The Bitcoin Gold blockchain was successfully 51% attacked, resulting in two deep block reorganizations
- The attacker(s) likely used rented hashpower
- The BTG market seemingly ignored the news, as the coin has increased in value in the last few days
The Bitcoin Gold blockchain was affected by a 51% attack which allowed an attacker to double-spend over $70,000 worth of BTG. The attacker managed to execute two deep block reorganizations on January 23 and January 24.
The Bitcoin Gold team acknowledged the 51% attack
The Bitcoin Gold development team acknowledged the 51% attack in a series of Twitter posts published on January 26. The team says it is unclear whether the attackers managed to profit from the attack, but said it’s likely they used the NiceHash marketplace to purchase the hashpower necessary for executing the attack.
The Bitcoin Gold team also says that they are working on a new consensus algorithm that will help prevent 51% attacks and double spends, and are expecting to release it in the first quarter of this year.
There were two 51% attacks on BTG’s blockchain last week on January 23rd. They successfully reverted deposits to an exchange. The first reverted ~1900 BTG, the second ~5267 BTG. We do not know if they successfully extracted any value from an exchange. 1/4— Bitcoin Gold [BTG] (@bitcoingold) January 26, 2020
The Bitcoin Gold network is no stranger to 51% attacks, as it was already successfully attacked in this manner in May of 2019. That attack was much more impactful, as it resulted in the loss of around $18 million worth of BTG.
Meanwhile, Lovejoy says it’s possible the attackers broke even even if they were unsuccessful in double-spending the funds.
“Based on Nicehash market price data for Zhash we estimate the cost of generating each reorg at around 0.2 BTC (~$1,700) and the attacker would have recouped around the same value in block rewards. Therefore, it is possible that the attacks were profitable if the double-spends succeeded at defrauding the attacker's counterparty, or break-even if the double-spends were unsuccessful.”
Bitcoin Gold has seen a considerable price surge in the last few days, despite reports of the recent 51% attack. The coin rallied from a low of $9.3 on January 24 to peak of $12.5 on January 27. This is further evidence to suggest that despite the progress made in the infrastructure for trading cryptocurrencies, the cryptocurrency market is still far from maturity.