The Shocking 51% Attack on Bitcoin Gold

The recent dual incidents rocking the Bitcoin Gold (BTG) blockchain represent a significant security breach that has left many scratching their heads—in disbelief and in fear. Over a mere 24-hour period, this hard-fork of Bitcoin faced not one, but two daunting 51% attacks that cleared the path for double spending exceeding $70,000.

What’s a 51% Attack Anyway?

Picture this: a flock of sheep (that’s your blockchain) and one very hungry wolf (that’s the attacker) who simply can’t resist taking down the whole herd. A 51% attack occurs when an individual or group manages to commandeer more than half of the hashing power. This power salute allows them to control confirmation of new transactions while also having the egregious ability to rewind time—like a bad ‘Groundhog Day’ sequel. Completed transactions can be unmade, and coins might be spent multiple times. It’s virtual chaos, and here’s how it unfolded.

Two Attacks: Back to Back

So, what transpired in those fateful hours on January 23 and 24? Hold on to your wallets:

• First Assault: At approximately 18:00 GMT on January 23, attackers jazzed things up by removing 14 blocks and adding 13 instead—straight out of the ‘first-class heist’ handbook. A whopping 1,900 BTG—around $19,000—went straight into the abyss, all from one simultaneously redirected transaction.
• Second Assault: Flash forward six hours, and we have round two! Another 15 blocks were discarded while 16 were reenacted. This time, a staggering 5,267 BTG (valued at around $53,000) vanished into thin air through three distinct redirected transactions.

Does Crime Really Pay Off?

One has to wonder: did our wolf come out with some sheep to show for it? The Bitcoin Gold blockchain operates on the Equihash algorithm—specifically Zhash—allowing mining with consumer-grade graphics cards. When looking at Nicehash market prices, it’s estimated that each of these blockchain rearrangements cost around $1,700. But here’s the twist: the block rewards might have compensated the attacker, creating a recommendation “hey, maybe we’ll break even” vibe. In fact, if they pulled it off, they could have made a profit from the double spend!

The Market Reacts

If one were to assume that the aftermath is a predictable land of doom, think again. Following the attacks, Bitcoin Gold saw a surge! It climbed from $10.42 to a whopping $11.60 in the blink of an eye on January 26. At the time of writing, BTG had risen nearly 14%—truly a plot twist worthy of a Netflix special.

Exchanges Change Their Game Plan

Oh, and let’s not forget about the big exchanges. Binance, the popular cryptocurrency trading platform, had some rules in place: BTG could be traded after just six confirmations and withdrawn after twelve. Well, the attackers rejoiced at that sweet loophole. Binance has since upped the withdrawal requirement to a hefty 20 confirmations. Although this step comes late, it certainly won’t negate the chance of a 51% attack being financially feasible given the right motivation.

A Lesson from the Past

If you think this is the first rodeo for Bitcoin Gold, think again! Back in May 2018, BTG experienced a similar 51% attack that cost around $18 million—resulting in its delisting from a major exchange. History does tend to repeat itself, doesn’t it?