Posted on May 26, 2018 at 5:06 PM
Hacking Attack Damages Bitcoin Gold for $18 Million
Yet another hacking attack on cryptocurrencies has been reported, and this time, the victim is Bitcoin Gold. According to reports, the currency has suffered a so-called ‘Double Spend’ attack.
A new attack on cryptos
Despite the fact that cryptos provide much safer and more private money transactions, they have had their fair share of difficulties ever since they became interesting to a larger number of users. A big part of their difficulties has included various hacking attacks, which have hit crypto exchanges, various blockchains, as well as users’ private wallets.
So far, the number of hacking attacks is still deemed relatively low, but that doesn’t make them any less of a threat, which is obvious from the latest attack that has targeted Bitcoin Gold.
The attack was issued by a miner who executed a double spend attack on Bitcoin Gold’s network. It is estimated that the attack damaged Bitcoin Gold for $18 million, which was enough to seriously damage the currency, as well as multiple exchanges that are offering this coin. So far, it is now known who has issued the attack. What is known, however, is that the party attempted to use 51% attack.
BTG forum was successfully tracking the attack’s development and has managed to confirm that the threat is real. Allegedly, the attack’s purpose was to perform the double spend attack, which can steal money from various crypto exchanges. The warning about the attack came from Edward Iskra, the Director of Communications, and it was issued on May 18. He stated that the exchanges were advised to review large deposits and increase confirmations.
The attack still came
Unfortunately, the attackers managed to gain control of the blockchain through the 51% attack. The attack itself required the attacker to obtain the majority of network’s hash power, which equals to 51% of it.
Now, despite the fact that BTG is not one of the giant coins, it still holds the rank of 26. That means that taking control over its blockchain requires a lot of money, which was probably obtained via the double spend attack.
After the attacker gained control over the blockchain’s network, they started to deposit funds on different crypto exchanges. This also included the coins which were previously moved to wallets that the exchanges were controlling. The resulting situation included $18 million missing, which is the total amount taken from various exchanges. So far, one of the involved accounts was tracked down, and it was discovered that it received 388,200 Bitcoin Gold coins last Monday.
It was confirmed that the attacks have stopped on May 18, but there is a strong possibility that the attacker might try another attack. This can only happen if they manage to once again seize the majority of the blockchain’s hah power.
BTG was not the only one under attack
Despite the severity of the attack, this was not the only incident that occurred last week. Two more cryptos were attacked as well, and those are Verge and Monacoin. Bitcoin Gold’s Mental Nomad has stated that the interesting thing about these attacks is that there is no risk to regular users, nor to their existing funds. Those who are at risk, however, are the individuals who hold the accounts that are on the receiving end of the attacks’ heists.
He also added that the exchanges’ post-attack actions seem to have prevented the attacker from coming back and trying again. BTG’s team believes that the most important thing to do right now is to improve the exchanges’ safety, which is why they are communicating with all of the affected exchanges. A lot of these exchanges were using pretty loose security systems, which is something that has to change if such attacks are to be prevented in the future.
Cryptocurrencies have already starting to build their home in the current economy, and since they are not going to go away, various businesses that are using them are the ones who will have to change. This primarily includes improving the security systems, and development of stronger and safer platforms. Of course, the biggest targets which also have the most vulnerabilities are the exchanges themselves. Because of this, their security will have to improve significantly, as soon as possible.