Bitcoin Gold

Bitcoin Gold (BTG) Hacked For $18 Million

Bitcoin Gold (BTG) Hacked For $18 Million

Bitcoin Gold (BTG) has been double spend attacked totaling something around $18 million at current prices. BTG forums have been tracking the hack closely going as far back as last week, monitoring the controversial coin’s hashrate and determining a 51% attack was under way.

“An anonymous party with access to very large amounts of hashpower is trying to use ‘51% attacks,’” Bitcoin Gold forum poster Mental Nomad said a week ago, “to perform ‘double spend’ attacks to steal money from Exchanges. We have been advising all exchanges to increase confirmations and carefully review large deposits.”

A founding principle of bitcoin was its alleviation of the double spend problem. It was a main stumbling block in the race to create a viable cryptographic monetary method. Satoshi Nakamoto solved it through a decentralized, distributed ledger confirmation process (blockchain). Going as far back as its genesis block from 2009, users can be confident transactions are not rebroadcast. Like clockwork, six times an hour, blocks are added – and then copied to nodes within the universal network.

Bitcoin Gold Hacked for $18 Million
The offending wallet, according to the BTG team.

One way to enact double spending is known as a 51% attack. It’s done by siphoning the network’s computing power. With a majority, malicious actors can get between the Satoshi Nakamoto solution and transaction confirmations. By stymieing block completion in the usual manner, all sorts of trouble can arise: blockchain mining rewards can be redirected, users’ transactions could be reversed, etc.

. Exchanges are particularly vulnerable because they generally covet large deposits, which only compounds the problem in cases like these.

GTNjvCGssb2rbLnDV1xxsHmunQdvXnY2Ft

Over period of several days, batches of BitCoin Gold were deposited into exchanges supporting the forked coin, only to be sent back to the depositor’s wallet. The lag between such a transaction and some exchanges’ discovery is sufficient enough to nab tokens, doubling the filthy lucre. Exchanges trading bitcoin gold have responded by raising transaction confirmation filters, however evidently with no luck as the attacker gains ever-more BitCoin Gold (BTG) network control.

Bitcoin Gold team members seem to have communicated with several exchanges. “Requiring more confirmations greatly increases safety,” the forum details. “Until now, some Exchanges were operating with less than 5 confirmations required. We have been urging higher limits to prevent such an attack, and urging manual review of large deposits of BitCoin Gold BTG before clearing the funds for trading.”

Bitcoin Gold Hacked for $18 Million
The traditional way BTC has been able to thwart double spend attacks.

Evidence put forward by the BitCoin Gold (BTG) team points to address GTNjvCGssb2rbLnDV1xxsHmunQdvXnY2Ft as the attacker’s wallet; mined coins, according to the forum post reside at GXXjRkdquAkyHeJ6ReW3v4FY3QbgPfugTx. More than 388,201.92404001 BTG were funneled through the wallet, totaling more than $18 million according to Bitcoin Gold Explorer. That a top thirty cryptocurrency by market cap can be so easily messed with is a big enough problem, but it could also take exchanges down in the process – something the ecosystem is very sensitive to since Mt. Gox. And though, for now, BTG is confident enough to suggest users are not at risk, history shows that can quickly be the case as an exchange freezes withdrawals in an effort to stop hemorrhaging.

Bitcoin Gold has been hit by controversies since its birth fork last year, including a recent spat between BitCoin Cash (BCH) advocate and all around d bag Craig Wright and BitCoin Gold (BTG) founder Jack Liao.

Olé Crypto,
CBNN

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