Bitcoin Gold receives "double spending" attack, exchanges lose millions

A malicious miner successfully executed a "double-spending" attack on the Bitcoin Gold network last week, causing BTG, at least the third altcoin, to succumb to a network attack during that period of time.

Bitcoin Gold communications director Edward Iskra first warned users about the attack on May 18, and explained that a malicious miner was using the exploit to steal funds from the cryptocurrency exchanges.

To execute the attack, the miner acquired at least 51 percent of the total power of the network, which gave them temporary control of the chain of blocks. Obtaining this large amount of resources is incredibly expensive, even in a smaller network, such as Bitcoin Gold, but it can be monetized through its use along with a double-spending attack.

After gaining control of the network, the attacker began depositing BTG in the cryptocurrency exchanges while trying to send those same coins to a wallet under his control. In general, the blockchain would solve this by including only the first transaction in the block, but the attacker could revert the transactions since they had the majority control of the network.

As a result, they were able to deposit funds in the exchanges and withdraw them quickly, after which they invested the initial transaction so that they could send the coins they had originally deposited in another wallet.

A Bitcoin Gold address involved in the attack received more than 388,200 BTGs since May 16 (most of the transactions were sent to itself). Assuming that all those transactions were associated with the double-spending exploit, the attacker could have stolen as much as $ 18.6 million in exchange funds.

The last transaction was sent on May 18, but the attacker could, in theory, try to resume it if he still has access to enough hash power to gain control of the blockchain.

The Bitcoin Gold developers advised the exchanges to address the attack by increasing the number of required confirmations before the credit deposits to customers' accounts. Blockchain data indicates that the attacker invested successful transactions in up to 22 blocks, prompting developers to recommend raising the confirmation requirements to 50 blocks.

Currently, Bitcoin Gold is ranked 26th in the largest cryptocurrency, with a working capital of 827 million dollars.

Bitcoin Gold is at least the third cryptocurrency network hit with a major attack in the last week.

As we reported earlier, a miner manipulated two of the five hashing algorithms of the privacy currency to maliciously extract more than 35 million XVG - a value of ~ $ 1.75 million - in just a few hours. Previously, the Japanese monacoin cryptocurrency was hit by an apparent blockade blocking the attack after a miner won as much as 57 percent of the network's hashrate.