Bitcoin Gold undergoes 51% attack yet again!

Bitcoin Gold [BTG], which is another hard fork coin of Bitcoin, recently underwent a 51 percent attack which costs approximately 7,167 BTG or $72k. This was revealed by James Lovejoy, President of MIT Bitcoin Club who detected two deep reorgs on BTG, both of which were double-spends.

Source: GitHub | Details of two deep reorgs on BTG

Lovejoy noted that in both the cases the attacker blocks were mined with the address GWrW5dTZf5XwGWoJuqRKdzkzZFkwtWSqaP in the Coinbase transaction. He further revealed that the Binance deposits of BTG, at the time of the attack, “were credited to one’s account for trading after 6 confirmations and were available for withdrawals after 12 confirmations”.

Lovejoy stated,

“A fourteen or fifteen block reorg would thus evade both of Binance’s escrow periods. Binance has since increased their withdrawal requirement for BTG to twenty confirmations. 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.”

He further added, that there is a possibility that these attacks were profitable if the double-spends succeeded at defrauding the attacker’s counterparty. It could also be a break-even if the double-spends were unsuccessful. This, according to Lovejoy, indicated that “a confirmation requirement on the order of tens of blocks for BTG is still far too few to make the budget constraint to launch an attack significant”.

The attackers were able to withdraw 1,900 BTG and 5,176 BTG via two separate transactions on 23rd and 24th January respectively.

Source: BTG Explorer

Source: BTG Explorer

In response to this development, Ethereum Classic Cooperative’s Executive Director, Bob Summerwill tweeted,

“ETC’s 51% attacks taught us that the perception we had of any attack rendering a chain economically worthless was an incorrect one. Because the “victims” are usually exchanges, not users”

This is not the first time that Bitcoin Gold suffered a 51% attack. In May 2018, this fork coin of Bitcoin sustained the attack in by a malicious actor in which 388,000 BTG was stolen from several crypto exchanges, following which the coin was delisted from Bittrex.