Double Spend Attack On Bitcoin Gold (BTG) Causes Chaos For Exchanges

Crypto Exchanges Lose Remarkable Amounts Of Money After Double Spend Mining Attack on Bitcoin Gold

Cryptocurrencies claim to operate more securely and privately than fiat currencies, but the truth is sometimes the security line is the way too thin and hackers just take advantage of it. Ever since virtual coins have emerged to the financial industry, many scandals have been linked to cryptocurrencies for great all robberies successfully deployed by hackers, a fact that even though has been decreasing lately still appears as a reality in the cryptosphere.

In this matter, another attack was recently deployed in a successful way against the token Bitcoin Gold. It all appears that a miner managed to execute a double spend attack on the network of the Bitcoin Gold token favorably, achieving, as a result, the loss of millions of dollars to several exchanges that trade with the said coin. This was first noticed by Director of Communications Edward Iskra who cautioned users on May 18.

The Strategy Used On The Attack

The malicious miner managed to get control of the whole blockchain by acquiring more than half (51%) of the hash power of the network. Even though Bitcoin Gold is a tiny coin, currently ranked as the number 26 of the market, obtaining more than the half of the hash power of a network is an action that requires an immense amount of money. However, this money can be even be created at the time of deploying a double spend attack.

Regarding this, Edward Iskra, the director of communications of Bitcoin Gold made a statement on the official Twitter account of the company saying that:

“An unknown party accessing large amounts of hash power is using “51% attacks” to perform “double spend” attacks on Exchanges. We have been advising all exchanges to increase their confirmations requirement and to review large deposits.”

The attacker started to deposit funds on different exchanges once it had acquired the majoritarian control of the network and parallel to that it transferred the very same coins previously moved to those exchanges to a wallet under their control. The blockchain actually resolves this double spend issue on regular conditions, but since the hacker had control over the network, it was possible to transact and reverse those operations later.

It’s estimated that during the attack at least 18 million dollars were stolen from different exchanges. In fact, one of the accounts that allegedly is involved in the attack received on May 16th the amount of 388,200 BTG tokens. After May 18 the attacks stopped, but still, there’s a chance for the hacker to deploy another one if it manages to gain control one more time of the majority of the hash power of the network.

With this assault, Bitcoin Gold is the third altcoin to suffer a robbery just in the last week, along with the cryptocurrencies Verge (XVG) and Monacoin, which recently were attacked as well.

Another interest feud is happening within the Bitcoin Gold double spend attack with Dr. Craig Wright (Satoshi or not he was there from the beginning times).

First we start off mild with the tweet…

https://twitter.com/ProfFaustus/status/999461614796640256

then there was this

Craig Wright – Bcash vs Jack Liao – Bitcoin Gold in Taiwan.

@ProfFaustus @bitcoingold @bitcoincash #fakesatoshi #bitcoin #BitcoinCash pic.twitter.com/Jv3IfYLzp9

— Jon Jones (Unitychain) (@JonEvansJones) May 23, 2018

then, to keep the momentum going check out the bold statements and directness presented by one of the early-day Nakamoto tribesman.

Interesting huh?

Conclusion

Cryptocurrencies definitely have come to stay and change somehow the financial industry,  but for them to accomplish its mission, it’s necessary the development of less fragile platforms that actively support the crypto statement of “security”.