Bitcoin Gold (BTG) is one of the 44 forks of Bitcoin and BTG has been quite successful too. A recent tragedy with BTG occurred where the cryptocurrency was hit by a 51% attack. The 51% percent attack allowed malicious individuals to double spend coins from Bitcoin Gold’s blockchain. Before you jump to any conclusions, you should know that Bitcoin Gold is not as secure the Bitcoin network is. Such an attack would have easily been tackled if attempted in the Bitcoin network.
According to early reports, the hackers were able to manage a majority of the computing power on BTG’s blockchain by holding a major proportion of the blockchain’s hash rate. By doing so, the controlling power can then be used to manipulate transactions on the compromised blockchain. This attack is called a 51 percent attack.
The Bitcoin Gold team has released statements that say that the attack started on May 16 and has been stopped for now. The statement mentioned that the network has been hit by a 51% attack which leads to the possibility of a double spend attack which ultimately allowed the hacker to steal money from crypto exchange platforms. The statement also mentioned that the BTG team has been advising crypto exchanges that allow trading of BTG to increase the security on transactions and carefully review large deposits. Also noteworthy is the fact that this amount has been stolen from the holdings of the crypto exchanges and other people’s existing funds haven’t been harmed.
According to the data procured by CryptoCompare, after the attack, it was revealed that a wallet linked with the attack had received about 388,000 BTG (equivalent to about $18 million currently). Most of the BTG has been transferred to other wallet addresses and the suspected wallet currently has only about 13,000 BTG remaining.
The team behind Bitcoin Gold revealed that one of the crypto exchanges that were targeted told the team that they strongly believed to have been a target of this attacker in the past too. The crypto exchange in mention reported having analyzed data that showed that the double-spend attack was attempted on the exchange in the past and that the exchange found many associations between the suspected accounts.
Several cryptocurrency exchange platforms have updated their policy’s over confirmations of large transactions and now require heavy-duty confirmations. Another report on the matter says that the upgrade to Bitcoin Gold’s mainnet – about to be conducted in June – will stop ASICs from mining Bitcoin Gold.
A lot of companies have also expressed concerns that Chinese cryptocurrency miners might be working collectively to accumulate a major hash rate of cryptocurrency blockchains that will allow them to attempt double spend attacks. This can be a real concern in small cryptocurrencies (like BTG) as the miners of such cryptocurrencies are very few. Such an attack is virtually impossible for Bitcoin because there are too many cryptocurrency miners around the world who can’t be controlled.