Bitcoin Gold, a hard-forked coin from Bitcoin, recently underwent a 51 percent attack on its blockchain, resulting in the double spend of 7,167 tokens worth around $72,000.
Revealed by James Lovejoy, President of MIT Bitcoin Club, the network of the digital asset endured two deep reorgs, both of which resulted in double-spending.
In his analysis published on Github, Lovejoy also pointed out that both the compromised blocks were mined using the same address.
“We note that at the time of the attack, on Binance deposits of BTG were credited to one’s account for trading after six confirmations, and were available for withdrawals after twelve confirmations,” he stated.
“A fourteen or fifteen block reorg would thus evade both of Binance’s escrow periods. Binance has since increased their withdrawal requirement for BTG to twenty confirmations.”
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A vulnerable network?
Bitcoin Gold is the result of a hard fork on Bitcoin’s blockchain and came into existence in 2017, a couple of months before the original digital currency touched its peak. The digital currency is based on the NiceHash algorithm, allowing users to mine the currency using a GPU.
Lovejoy’s report also estimated the cost of generating each reorg at around 0.2 BTC (approximately $1,700) and pointed out that the attacker would have recouped around the same value in block rewards.
“It is possible that the attacks were profitable if the double-spends succeeded at defrauding the attacker’s counterparty, or break-even if the double-spends were unsuccessful,” he added. “This suggests that a confirmation requirement on the order of tens of blocks for BTG is still far too few to make the budget constraint to launch an attack significant.”
The forked-digital currency also endured another similar 51 percent attack on in May 2018, which resulted in the theft of $18 million worth Bitcoin Gold via double spend.