Six of the most notorious 51% attacks: the survival of the fittest is the jungle law of cryptocurrency

Encrypted digital currency based on proof of work solves the problem of General Byzantine and allows nodes of a decentralized network to coordinate with each other, even if some nodes may do evil. However, this also created a way of attacking the digital currency for the proof of workload: 51% attack.

In 51% of attacks, the attacker accumulated most of the hashing power of a cryptocurrency. This is usually done to roll back the transactions they make on the network. Exchanges often have to bear the cost of such attacks because they are the easiest way for an attacker to profit from a fork.

If the attacker's target is ETC, he can deposit the ETC into an exchange, convert it to another cryptocurrency, and then quickly remove it. Because the attacker has most of the HTC's hashing power, he can generate a competitive chain that does not contain the deposit. Once the length of the competition chain is longer than the original chain, it is legal for him to force the network to accept the corrupt chain: cancel the transaction he deposited on the exchange.

Although bitcoin and Ethereum have never been successfully attacked by 51% of cryptocurrencies, many of the smaller-capital currencies do not have the advantage to defend against attacks. Last year, the rise of cloud mining and computing leases led to 51% of attacks becoming more and more successful. This article will take you through some of the most important 51% attacks in the history of cryptocurrency.


Coiledcoin – January 6, 2012

Coiledcoin is a short-lived clone of Bitcoin that supports merge mining and opcode OP_Eval. Coiledcoin's client was released on January 5, 2012. Just a day later, Bitcoin developer Luke Dash Jr. posted on the Bitcoin forum:

Coiledcoin is over now, I wish you a happy life.

Coiledcoin allows for mining mining, which means miners who dig Bitcoin Sha-256 algorithm can dig Coiledcoin at the same time, which makes it very easy to be attacked by 51%. At the time, Luke was running the Eligius pool, which led some community members to accuse him of contributing power to attack Coiledcoin, although he denied it. Luke's main reason for attacking Coiledcoin is that he believes that Coiledcoin is a fraud and pyramid scam that will "reduce and damage the reputation of Bitcoin."

Peter Todd: Luke should not kill Coiledcoin, but Coiledcoin also has no ability to make a side chain that merges with mining.

The interesting thing about the Coiledcoin attack is that it is not economically driven, but purely political. Although this move has caused some protests from the community, it shows how vulnerable the low-hash computing SHA-256 cryptocurrency is.


Feathercoin – June 8, 2013

Feathercoin is a Scrypt algorithm cryptocurrency created on the basis of Litecoin, which was released on April 16, 2013. Feathercoin is very similar to Litecoin, with only two differences. First, the total amount of Feathercoin rose from 84 million to 336 million. The second is Feathercoin's difficulty in adjusting mining more frequently.

Seven weeks later, on June 8, Feathercoin was attacked by 51%. Before the attack, Feathercoin's total power was 0.2 GH/s, and during the attack time, the power was turned 7 times to 1.5 GH/s. After 31 hours, a survey showed that the attacker took away 580,000 Feathercoins on the exchange's double-flower attack, at a price of $63,800.

Although it is not clear where the attacker spent the coin, some users of the Bitcoin Forum pointed out that the transaction was suspended slowly at the time, and now the BTC-E transaction that has been out of service has handled several attacks after the attack occurred. Large order.

Interestingly, Feathercoin's price has not been affected by the 51% attack, but continues to rise in the next few months. At the time of the attack, Feathercoin was priced at $0.11, and at the end of 2013, its price reached a new high of $1.29.

Peter Bushnell, the creator of Feathercoin, said the power of the attack could come from the Wright coin pool or any mine that digs the Scrypt algorithm token. Using the same hash algorithm as a more popular token, it is vulnerable to 51% attacks, which is magnified by the rise of cloud mining in the next few years.


Krypton – August 26, 2016

Krypton is copied from Ethereum and has almost exactly the same functionality: smart contracts, scripts, and more. Krypton claims that it costs less than Ethereum, and this is basically because Krypton is less valuable than Ethereum, and Krypton has lower unit price for computing power.

Like many low-powered altcoins, Krypton is very vulnerable to 51% attacks and eventually became august on August 26, 2016. The attacker initiated a DDOS attack while initiating 51%. They took away 21,465 won ($3,434) in tokens from Bittrex through a double flower transaction. The attack may be part of a plan to exploit the Ethereum Ark currency vulnerability, and other objects include Shift and Expanse.

The attacker sent a blackmail letter to the Krypton team:

We have a Krypton chain that can be forked at any time. Since the bittrex wallet was attacked two days ago, we have dug 7000-8000 blocks. But our purpose is just bitcoin, not a project.

Today, we sold the remaining 20,000 won and will give you a chance to end our farce. We don't have much to do, just get back our costs. With 7 bitcoins, we stop splitting. This is 20,000 won plus 8,000 blocks and mining costs.

If you agree, contact us and we will stop the attack, otherwise we will fork 8000 blocks.

Krypton refused to pay the ransom, and after the attack, Krypton founder Stephanie Kent announced that the token would turn to the PoS consensus mechanism to prevent future attacks. The move was clearly unsuccessful: the project was terminated a few months later.


Verge – April 4, 2018 and May 22, 2018

Verge was fortunate to be the only token on our list that suffered two 51% attacks. Verge is designed as a "secure and anonymous" privacy currency. It forks the dog's coin, and the publicity of the privacy feature is essentially routing transactions through the onion network, and the "soul protocol" is basically that you can use the secondary address on Verge. These features have little to do with protecting user privacy, but Verge reached its top in December 2017, reaching a market value of $3 billion.

The first attack occurred on April 4, 2018. Verge deployed an algorithm called "dark gravitational waves" to adjust the network difficulty in the average 30-minute time window between block acknowledgments. The attack on Verge is quite complicated. The attacker modified the timestamp of the blockchain, reduced the difficulty of Verge, and successfully succeeded using a computing power well below 51%. Before the attack, the difficulty of Verge was around 139,093; when the attack occurred, the difficulty plummeted to 0.00014414.

In response to the attack, the Verge team upgraded the protocol, but the accident caused a hard fork to make the network have to roll back. The team's efforts to repair the agreement did not work. On May 22, the same attack occurred again on Verge, involving a larger amount than before, reaching 35 million Verge, equivalent to about 1.7 million US dollars.

In an article about the attack, Abacus Solutions founder Daniel Goldman pointed out that both attacks provide strong arguments for adhering to proven practices and remind people not to make things too complicated. So as not to bring unnecessary risks when it comes to financial assets.

The attack on Verge can be attributed to the complexity of the protocol: allowing miners to use five different hashing algorithms to deploy a function called "dark gravitational waves"; these may all be unnecessary repetitive wheels.


Bitcoin Gold (BTG) – May 16, 2018

Bitcoin gold is a hard fork of bitcoin, which aims to promote decentralization through anti-ASIC algorithms.

Bitcoin gold uses the Equihash algorithm for mining, just like ZCash. Equihash is a heavy memory algorithm that Bitcoin Gold chose to promote graphics mining on the web.

Unfortunately, just like the previous 51% attack, this also makes Bitcoin Gold particularly vulnerable to 51% attacks. The attacker does not need to purchase his own hardware, just rent the graphics card from the power rental market during the attack.

On May 16, the attacker launched the first attack on Bitcoin Gold. The last attack occurred on May 19th three days later. The purpose of these attacks was to spend a bit of Bitcoin gold on the exchange, about 12239 BTG was traded, worth about $18 million.

This account may be the account of the Bitcoin Gold Attacker

After the first attack was discovered, the Bitcoin Gold Development team recommended that the exchange require 25 or more confirmations to ensure transaction security. Two days later, the development team suggested adding 50 confirmations.

In response to the attack, the Bitcoin Gold team eventually made a hard fork to support ZHash, an enhanced version of Equihash that is more resistant to ASICs. But this does not solve the fundamental problem of Bitcoin gold. Since ZHash can be exploited by the general-purpose GPUs rented on the market, and bitcoin gold has a low computing power of only 2.85 MH/s, it seems only a matter of time before it is attacked again.


Ethereum Classic (ETC) – January 5, 2019

The Ethereum Classic is a project that has been hardly forked from the Ethereum Agreement after the 2016 DAO event. The Ethereum Classic is a decentralized computing platform that values ​​immutability.

The 51% attack on the Ethereum classic began on January 5, 2019, and resulted in the reorganization of 15 blocks over the next two days. The attackers acquired a total of 219,500 ETCs, or about $1.1 million. According to Crypto51, the cost of the attack is around $5,473 per hour. After the attack, announced that it was one of the attacked exchanges, losing 40,000 ETCs.

Like Ethereum, Ethereum uses the Ethash algorithm, which makes it particularly vulnerable. When the attack occurred, the network power of Ethereum was about 183 TH/s, which was nearly 25 times higher than the classic 8.75 TH/s of Ethereum. This means that an attacker can easily borrow a hashing power from a cloud mining service provider to attack the Ethereum classic without investing in any real hardware.

After the attack, ETC developer Donald McIntyre pointed out:

This 51% attack is a major setback for ETC, but I think ETC still has its own position in this industry. We are a network with proven workload and a complete Turing, with an active community and soundness. the rules. The question we have to think about is whether ETC can recover in the medium to long term, or because of the lack of significant growth, the network will always be so fragile and unusable.

A few months later, the Ethereum classic is still vulnerable. At present, the Ethereum classic still uses Ethereum's Ethash algorithm, which has a network hash rate of 9.6 TH/s, which is only slightly higher than the last attack.


51% of attacks are a feature of cryptocurrency, not a vulnerability

The 51% attack is a manifestation of the “survival of the fittest” in the encrypted digital currency industry. These attacks have spurred the development of new crypto tokens and new workload proofing algorithms, attracting investment in specialized hardware, and the more capital investments, the more secure the blockchain. For example, Grin's mining is a memory-intensive process, and developers plan to continue to increase memory requirements. This rewards those who specialize in deploying hardware for the Grin ecosystem, reducing the value of ASIC miners.

While 51% of attacks are often considered a drawback of workload proofing cryptocurrency, this is actually a feature, not a vulnerability. 51% of attacks spur innovation in cryptocurrencies, eliminating weaker tokens on the market. It rewards exchanges that can quickly stop trading during an attack, while punishing those unresponsive exchanges. Finally, it is a manifestation of decentralized consensus, because those who choose to mine in the mainstream chain are using their hash calculations to vote to ensure the security and power of the network.



Author: honeyminer Diggy the Bear

Translation: Orange Book Volunteer BUSTER

Source: Orange Book