Privacy Cryptocurrency Firo, Formerly ZCoin, Suffers 51% Attack; Token Falls 17%

Proof-of-Work cryptocurrencies have suffered several attacks in the past several months. The latest being the privacy-centric crypto Firo, previously known as ZCoin, which suffered a 51% attack.

Reported on Wednesday through its Twitter account, Firo staff advised holders of its tokens to pause all pending transactions until the network is made secure.

We are under 51% attack at the moment. We recommend not to make transactions during this time until the network returns to a normal state. We will post updates when we have them. Note this is not a coding error but a nature of PoW. $XZC $FIRO

— Firo (formerly Zcoin) (@firoorg) January 20, 2021

The community was only made aware of this attack when users reported that their previously approved transactions had reverted to ‘unconfirmed' on the platform.

While the consequences of this attack have yet to be fully quantified, Firo's token price has slipped by 14% in the past 24 hours, blunting a 14-day period of positive performance. Taking to Twitter, Binance CEO Changpeng Zheng reported that,

XZC(FIRO) 51% attack, 306 blocks rolled back, to 2021-01-18 17:24:20(UTC). Another messy situations.

— CZ 🔶 Binance (@cz_binance) January 20, 2021

What made this attack possible?

Unlike other blockchains that use Proof-of-Stake, Proof-of-Work blockchains are more likely to have a lower hash rate; this puts them at greater risk to 51% attacks at any time. For example, Ethereum Classic was the victim of several of these attacks, with the largest one resulting in the loss of over $5.6m in ETC.

Specifically for the Firo team, the attack became more likely due to the delay in deploying an additional validation layer to its ecosystem – commonly known as a ‘Chainlock.'