51 percent attack news

Attack on a blockchain network by a group of miners controlling more than 50% of the network's total hashrate.

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Ethereum Classic’s 51 Percent Attack Highlights the Challenges of Proof-of-Work Coins

On Jan. 5th, Ethereum Classic (ETC) suffered a 51% attack losing a total of more than US$1 million spread over 15 different transactions. The scale of this attack can offer some lessons to the challenges faced by blockchains secured by Proof of Work (PoW). This is not the first majority attack that has occurred. In 2018, there were a string of 51 percent attacks on Equihash based coins, Zencash (now called Horizen), and Bitcoin Gold, as well as attacks that were from difficulty adjustment bugs on Monacoin and Verge. To date, details of how the ETC attack happened isn’t clear. Some claim the attackers rented hash rate. Others claim that it was testing of an unreleased ASIC, or a Border Gateway Protocol (BGP) attack that rerouted hashing power to a private pool. We can learn from this event by looking into PoW’s security, evaluate whether ASICs help in providing security, and evaluate other proposals that add further security to PoW coins. PoW Is Still Our Best Option Whatever the cause, the attack highlights the challenges facing PoW coins, especially for those that are not the dominant coin for a particular mining algorithm. One of the economic assumptions of PoW and especially those that are secured by ASICs is that miners would not be incentivized to destroy their source of income and thus render their own investment worthless. However, this doesn’t apply if they can redeploy those assets to mining other coins after the attack. The reason behind this vulnerability has to do with hash rates. While it would normally be too difficult to convince individual miners to combine their hashing power, today, there are sites like Nicehash, which offer an on-demand service to pool and rent hashing power from several computers instantly. This means coins that are not dominant in their mining algorithm are more vulnerable to 51 percent attacks. For example, Ethereum Classic’s hashrate is 22 times lower than Ethereum, so orchestrating an attack only requires a fraction of Ethereum’s hashrate. This has often been seen as a reason to move towards systems such as Proof of Stake (PoS) where no mining is required. PoS systems are passive and require no additional work beyond just owning the coins, meaning the rich get richer with almost no effort. This, however, ignores other properties of PoW which still makes it one of the best systems for a decentralized currency. PoW remains the preferable way to distribute coins since it rewards actual work that involves real-world costs (e.g. electricity). It also requires a constant and ongoing effort to continue earning coins. There is a separation of those who provide the security and those who own the coins. For a currency where a continuation of wide distribution is important, PoW is hard to beat. PoW algorithms like MTP (Merkle Tree Proofs) as developed by Zcoin or ProgPoW have begun to tackle this problem by reducing the gap between specialized and commodity hardware. This enables more egalitarian mining since miners—whether large scale or hobby—will be using the same hardware to mine. ASIC or CPU/GPU Mining: Which Provides More Security? Without an algorithm that neutralizes the mining advantages that ASICs have, PoW coins can be compromised when transitioning from CPU and GPU mining. This is especially true if ASICs are being developed, if mining in secret, or if they are just coming onto the network. Due to the poor distribution of these ASICs, a handful of people can control a significant proportion of the network hash rate making it much easier to obtain 51 percent. While not widely publicized, we have already seen this take place with Monero, when ASICs began mining the coins before the hardware was publicly available. Zencash and Bitcoin Gold’s 51 percent attacks also coincided with the arrival of Equihash ASICs. Both these coins were not the dominant coins in the algorithm, making it worthwhile for attackers since miners could always switch back to mining the dominant Equihash coin, Zcash. Even in instances where ASICs are already being used to secure the network, the economics of attacking an ASIC-backed coin versus one that is backed by commodity hardware differs drastically. In the case of ASIC-backed coins, a single mining farm can be all it takes to attack smaller coins and is indeed a likely scenario if the mining collective supports the dominant coin. With ASICs, there is also the risk of hardware mono-culture or backdoors. If everyone uses the same type of miners, they are at greater risk if a vulnerability is found. Incidents like Antbleed and the hAnt virus hint at how buggy or malicious firmware can affect large swathes of ASICs—even if they are distributed across different mining farms or mining pools. On the other hand, while coins backed by CPUs and GPUs are vulnerable to rented hash rates, the opposite is possible, where a hash rate can be rented back to reverse the attack. We have seen this with Graft, a project that uses the same hashing algorithm as Monero. Improving PoW to ensure it stays egalitarian, stable, and secure, prevents shocks like these as the same commodity hardware can be used both for attacking as well as defending the network. Strategies to Secure PoW There are two main strategies that are being developed to further secure algorithms for coins. These involve either adding secondary validation layers, or by penalizing delayed block submissions to increase the cost of an attack. One recently proposed solution by Dash involves LLMQ-based chain locks, which uses masternodes to form quorums to vote and measure which block was ‘first seen.’ When enough masternodes agree (>60) that a particular block was first seen, all other blocks of that height will be rejected. Therefore, no reorganization can take place below that block. This also nullifies 25 percent selfish mining attacks from taking place since blocks that are mined—but not broadcasted—will not be ‘first seen.’ Another benefit is that it makes a 51 percent attack less likely because both masternodes and miners would need to collude for this to take place. Decred, although using a hybrid PoW and PoS system, would require both miners and ticket-holders to collude to compromise its blockchain. The second strategy involves punishing delayed block submission. This strategy has been implemented by Horizen and works by imposing a delay penalty on forks that are being privately mined and then connected to the main chain. Before a forked chain can be permanently cemented, an attacker would need to continue mining on the new chain after their attack has taken place, thus increasing the cost of implementing a continued attack. The downside of this proposal is that it increases the time before forks can merge and may result in more forks. Jonathan Toomim, a Bitcoin Cash developer, has also proposed a similar strategy where chains are given weightings which are penalized for keeping a chain hidden. This means the penalty increases, the longer the chain is kept hidden. Therefore, it is no longer just the chain with the most accumulated PoW that dominates, but also factors in which chains are submitted in a timely manner. Ultimately, these proposals greatly increase the overall cost of attack. Although Bitcoin proponents note that an attack of this sort is much harder to pull off on a coin like bitcoin, it is not impossible. A notable critic of the weakness of unmodified PoW is Professor Emin Gun Sirer, who believes that even Bitcoin can be attacked by a few large players and the only reason it hasn’t happened is that Bitcoin is simply not big enough to matter right now. Another ignored metric is the cost of a PoW attack in comparison to its market capitalization since larger coins have much more at stake. The ETC attack shines a glaring spotlight on PoW’s weaknesses which were previously thought to be a remote possibility or a problem for smaller coins only. What’s most concerning here is that PoW coins that do not have majority hash rate for its algorithm or miner class (commodity hardware vs ASIC) are the most vulnerable. Luckily, methods to augment PoW are already being deployed or are in development. PoW-based coins need to implement additional safeguards as soon as possible. With the ETC attacker returning some of the proceeds of the attack, perhaps this was the point they were trying to make all along. The post Ethereum Classic’s 51 Percent Attack Highlights the Challenges of Proof-of-Work Coins appeared first on CryptoSlate.
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BitMEX: Several Altcoins could be subject to a 51 percent attack from BitMEX’s insurance fund

BitMEX, the Hong-Kong based cryptocurrency trading platform holds so many Bitcoins in their Insurance Fund, that they can potentially initiate several 51 percent attacks against many top coins in the market at present. At press time, BitMEX’s insurance fund holds 21,366.4 Bitcoins which will equal to $76.3 million. Some Twitter users compared the presence of the fund and the attack it could set-off to the Majoras’ Mask in the game The Legend of Zelda as, “knowing the moon is going to destroy you but it’s a long time away so, “eh”.” Several sharp-eyed users picked up this development in mid-December when the apex of the bearish market had subsided but the market was still in decline. BitMEX earlier stated, as 2018 began, that the trading platform holds only 2720 BTC [$75.9 million], since then the amount of BTC held in the fund has shot up by almost 8 times since the January 1st, 2018 numbers were released. Zack Voell, a producer at the popular cryptocurrency podcast “The Coin Pod” explained the BTC holding of BitMEX on January 22, 2019, Twitter thread. Voell kept a track of BitMEX’s BTC held since early 2016. Within a period of one year, from January 2016 to January 2017, BitMEX added 162 Bitcoins to their fund, the following year, the amount held would rise up by over 1,500 percent to reach 2,720 BTC. Furthermore, in one year, the coin’s Bitcoins held increased to 20,776 as the cryptocurrency prices kept falling through the year. Source: @zackvoell Source: @zackvoell Voell further portrayed that the amount of Bitcoin’s held in the trading platform’s insurance fund increased as more and more of the top cryptocurrency was supplied into the collective currency market. He further went on to compare the insurance fund, with its 21,366 BTC held to: “• 1% of Coinbase valuation • 2x Laszlo’s pizzas • 580 2018 GranTurismos • 3,800 hours of an $LTC 51% attack” Some Twitter users called this out as a “conspiracy,” but Vowell reaffirmed that this information was based on publicly available data which can be easily availed. Eric Wall, another Twitter user stated: “So, by 2022, all bitcoin in the world except a fraction will be locked up in BitMEX’s insurance fund. With that much BTC off the market, the price per BTC won’t be limited to $1m, but rather $1tn. This is actually good for bitcoin.” An analysis conducted by Crypto51, on the cost of Proof-of-Work 51 percent attack revealed that most virtual currency blockchains could be attacked by relatively small holdings. A 1-hour attack on Litecoin [LTC], for example, would come at a cost of about $20,000, attacks on smaller coins like Bytecoin [BCN] would cost $139 and Ethereum Classic [ETC] would be under $4,000. Given its current holdings, BitMEX could run a 51 percent attack on top coins like Bitcoin Cash [BCH], Monero [XMR], Dash [DASH] among others for more than a year. There’s no doubt that BitMEX has fared better than most cryptocurrency companies despite the ‘Crypto-Winter,’ moving into their new office in August 2018, which is also the most expensive office building in all of Hong-Kong. The post BitMEX: Several Altcoins could be subject to a 51 percent attack from BitMEX’s insurance fund appeared first on AMBCrypto.
AMBCrypto

Ethereum Classic’s 51 Percent Attack a Lesson For Altcoins

The now confirmed 51 percent attack on Ethereum Classic has put altcoins on notice. While reorg attacks are part and parcel of the risk of decentralized systems, a number of altcoin communities have taken steps to avoid such attacks on their digital assets. For others, the ETC attack should be a lesson for altcoins to secure their network before they suffer a similar fate. Also read: Next Up – Bitwise Bitcoin ETF Would Track BTC, ‘Meaningful Hard Forks’ Subscribe to the Bitsonline YouTube channel for great videos featuring industry insiders & experts ETC Blockchain Rewritten 15 Times The ETC blockchain was rewritten 15 times between January 5th and 7th, representing a loss of around 220,000 ETC (roughly $1.1 million USD). As is well-documented, a 51 percent attack occurs when a malicious actor gains control of the majority of the hash power of a network. The majority rules in decentralized Proof of Work blockchains. As Coinbase reminded us, Satoshi Nakamoto’s original bitcoin whitepaper asserts that: “If a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains.” The need for an honest majority is considered a known weakness of Proof of Work blockchains. Litecoin’s Charlie Lee, however, sees things differently, defending 51 percent vulnerability as a feature of decentralized blockchains, not a flaw: This is a thought-provoking observation. By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources. If a crypto can't be 51% attacked, it is permissioned and centralized. https://t.co/LRCVj5F0O1 — Charlie Lee [LTC] (@SatoshiLite) January 8, 2019 Alts Have Been Hit in the Not-too-Distant Past Within days of the ink drying on its May 2018 Pornhub deal, Verge XVG was hit with a 51 percent attack, losing $1.9 million USD through excessive mining by a bad actor. That came within about a month of an attack in early April when a malicious actor rapidly mined Verge blocks with spoofed timestamps–exploiting the same vulnerability. A week after that first attack, they were targeted again. All in all, the spring of 2018 saw 35 million XVG coins created ahead of schedule and sold off. May 2018 also saw controversial bitcoin fork Bitcoin Gold attacked, with exchanges stung for around $18 million after the double-spending was accomplished. And Vertcoin was hit in October last year–16 orphaned blocks suggesting a chain reorg had been accomplished through a 51 percent attack. Altcoins Strike Back Against 51 Percent Attack After a tumultuous June 2nd, on which it suffered three double-spend attacks for losses in excess of $120,000, Horizen–the crypto formerly known as ZenCash–upgraded its network to prevent miners from broadcasting long chains, which had caused the vulnerability. Komodo uses the bitcoin blockchain to store backups of its own blockchain. It also deploys a system it calls Delayed Proof of Work. In DPoW, it has 64 elected notary nodes who record a block hash from a block onto the bitcoin-held backup every ten minutes. Komodo aside, the ETC incident remains a lesson for altcoins. But the Threat Remains Real If two blockchains use the same algorithm, then the smaller one will always be susceptible to risk of an attack. And as crypto51 shows, sometimes hashrates are too low and prices sufficiently high for there to be an incentive to perform an attack. Defending and securing their blockchains is up to altcoin communities. Komodo’s creative approach to resolving security problems preemptively has been mimicked by five other blockchains. Perhaps it is time the entire altcoin ecosystem made a stronger effort to secure their blockchains and avoid more carnage. Have your say. Does the ETC 51 percent attack provide a lesson for altcoins to get organized before they get reorganized? Images via Pixabay The post Ethereum Classic’s 51 Percent Attack a Lesson For Altcoins appeared first on Bitsonline.
Bitsonline

Coinbase Suspends Ethereum Classic Following 51 Percent Attack

Coinbase has ceased interactions with the Ethereum Classic (ETC) blockchain after the exchange detected a 51 percent attack on the network. Following the discovery of a “deep chain reorganization” of the ETC blockchain, Coinbase suspended Ethereum Classic withdrawals and deposits. Also Read: Major Mining Pools Have a ‘High Die-Off Rate’ Study Reveals Coinbase Stops Interacting With ETC Blockchain After Deep Chain Reorganization Coinbase has published a blog post titled “Ethereum Classic ETC is Currently Being 51% Attacked” detailing a malicious attack on the ETC network. The post states that on Jan. 5, 2019, Coinbase detected “a deep chain reorganization of the Ethereum Classic blockchain that included a double spend.” In order to safeguard customer funds, the exchange “immediately paused interactions with the ETC blockchain.” The exchange was alerted to the attack by its automated systems, after which the company’s on-call engineers responded and worked to confirm the report. Coinbase chose not to publicly post analysis pertaining to the attack earlier in order to avoid creating a “false alarm” that could have created premature or unnecessary market instability. The company also notes that traders who attempted to send or receive ETC using Coinbase’s platforms were unable to complete said transactions as a result of the response. Coinbase Yet to Re-Enable ETC Transactions Since the incident, Coinbase claims to have detected “12 additional reorganizations that included double spends,” totaling 219,500 ETC valued at approximately $1.1 million. The exchange notes that “a full blockchain analysis is beyond the scope” of its blog post, adding that further examination into “the addresses sending the double spend transactions, the history of sends/receives from the addresses, the block fields such as timestamp, and the subsequent movement of miner rewards from attack blocks may shed light on the threat actor or actors behind these attacks.” Coinbase is currently assessing the “safety” of re-enabling ETC transactions and will communicate with customers regarding updates to the exchange’s support for Ethereum Classic. The post asserts that “Coinbase was not the target of this double spend and no funds were lost.” What is your response to the recently increased prevalence of 51 percent attacks targeting altcoins? Post your thoughts in the comments section below! Images courtesy of Shutterstock At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more. The post Coinbase Suspends Ethereum Classic Following 51 Percent Attack appeared first on Bitcoin News.
Bitcoin News

Vertcoin Suffers A 51 Percent Attack

Vertcoin is a lesser known project, but it’s becoming more familiar for all the wrong reasons. You might not know it by looking at the price action, but Vertcoin (VTC) is currently under  a 51% attack, with  a wave of reorgs and double-spend activity currently unfolding. Coinbase Security Engineer Mark Nesbitt published a blog post about an ongoing investigation into nearly two dozen “deep chain reorganizations” in Vertcoin, more than half of which included “double spends of VTC” worth more than $100,000. Chain reorganizations are akin to the blockchain version of alternate timelines you see in superhero movies, only in real life, no one saves the day. The biggest reorg had a “depth of 307 blocks and a length of 310 blocks.” Vertcoin isn’t the first cryptocurrency to suffer a 51% attack, and it probably won’t be the last. Bitcoin Gold and Verge came under similar attacks this year, exposing the vulnerabilities in the Nakamoto consensus algorithm. As for Vertcoin, Nesbitt outlines four separate attacks, the most recent of which began on Nov. 29 and continues today.  The incident is comprised of four reorgs and double-spends were part of all of them. Some in the VTC community were quick to blame the developers, volunteers who are feverishly trying to fix the problem with an upcoming hard fork and who want to eliminate rented hash power and ASIC-fueled mining on the network. Vertcoin devs aren’t aware of any “culprit” or “victim.” Some people have complained that we have not said anything about the 51% attack. Well, some of us have been working on the solution. The rest of our team was taking time to create a response to help educate the public on such attacks. Below is that response. $VTC #Vertcoin https://t.co/QaQZibBmXv — Canen (@Canen01) December 4, 2018 Plenty of Blame to Go Around Coinbase’s Nesbitt, meanwhile, went for the jugular, linking ASIC resistance with the security of a cryptocurrency like Vertcoin. But as Satoshi Nakamoto stated in the white paper: “The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.”  Nesbitt pointed to the ASIC resistant nature of Vertcoin: While a full exploration of ASIC resistance is out of scope of this article, the observations above strongly suggest that pursuit of ASIC-resistance in a coin is counterproductive to the coin’s security. Vertcoin is an ASIC-resistant project, but according to one of the developers VTC “is mined with public ASICs now,” which the team plans to fight with an upcoming hard fork dubbed Lyra2REv3. Vertcoin developer Eric Kubik disagreed with Nesbitt’s characterization of the facts, saying rather than “ASIC resistance” the issue is tied to NiceHash, which if true has been anything but nice to the project. NiceHash is a Slovenian marketplace for buying and selling hash power. The Reddit community was quick to blame ASICs, suggesting the ASIC-resistant project should have removed ASIC-powered hash power. Meanwhile, Vertcoin shares software developers with the MIT-DCI Lit Lightning Network, including Gert-Jaap Glasbergen, who explained on social media: This isn’t caused by the ASICs but by Nicehash. There’s too much hashrate for rent at too low a price resulting in zero capex and low opex to do attacks. Vertcoin devs are close to launching the fork, which is designed to “temporarily stop mining outsourceability.” The devs argue that while ASICs may bolster the security of the Bitcoin network, they have the opposite effect on smaller networks like Vertcoin. The team is sold out and say they “will NOT compromise on decentralization by implementing centralized controls and…will not give up on fighting ASICS.” In the interim, they’re urging investors to “protect yourself against double spends.” Vertcoin recently dedicated a podcast to a website that attaches the cost of a PoW 51% attack including VTC, which may have placed a target on the coin’s back.   The author is not invested in any digital currency mentioned in this article but is invested in other cryptocurrencies.    The post Vertcoin Suffers A 51 Percent Attack appeared first on Crypto Briefing.
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Gold-Backed AurumCoin Latest to Fall Victim to 51 Percent Attack

Gold-backed AurumCoin is the latest cryptocurrency project to fall victim to 51 percent attack, resulting in the loss of AUD$ 15752.26, per a report by Finder on November 12, 2018. Hack Attack Results in Blame Game Shortly after the hack attack, AurumCoin’s twitter handle subtly sparked the blame game stating the coins were stolen from the wallet of cryptocurrency exchange...Read More. The post by Aisshwarya Tiwari appeared first on BTCManager, Bitcoin, Blockchain & Cryptocurrency News
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It Costs $20 to Launch a 51 percent Attack on Einsteinium and Less than $200 to Force a Hard Fork in Feathercoin

There is this other side of crypto. It’s dark and full of dead coins. It keeps piling up every time ETH or BTC print lower. Though the market is expecting a rally with Ran Neur listing a couple of indicators to justify his bullish stand, Einsteinium coin creators and “community” should be having a hard time. Last year,around this time,BTC went from $6691 (Nov 11) to $20000 (Dec 17) in 5 weeks.This on the back of the expectation and launch of a cash settlement BTC futures contract. An ETF is a way bigger deal & requires actual purchase of BTC.2 looming SEC decision deadlines ahead. — Ran NeuNer (@cryptomanran) October 7, 2018 A daring user by the name Piracy1 is planning to launch a 51 percent attack on the network for demonstration purposes. His reasons he says is to “to show people how easy it is and maybe prompt developers to implement mitigations”. He adds saying “I also just want to talk about 51 percent attacks because I think they’re neat”. What’s more? The attack will be available for all to witness via Twitch. Einsteinium is gullible because it is a Bitcoin hard fork but uses Scrypt for hashing. There is deep corrosion of its value and hash rate. As it is, to attack the network for one hour will cost $20. Controversy Around the 51 percent Attack As controversial as it is, the user Piracy1 plan to raise collect donation and could launch another attack on Vertcoin. However, this wasn’t received well by user Ersiees who inquired about his overall motive. In a thread Ersiees asks: “What these attacks are about is stealing money, right? Is that your plan? Why do you want donations to steal something or if you don’t steal anything how will you change the chain?” Piracy1 said he his announcing this attack in advance for educational purposes and “people can choose to not accept any transaction as confirmed until the attack is over”. As usual, users didn’t take this lying down. Some elucidated their feelings saying Piracy1 action is pure fraud, outright theft and illegal. A user Chris_mc1 was particularly vocal saying: “Isn’t this massively illegal? You’re basically DoSing a network. Possibly theft as well!” But a user Koolba interjected saying: “On the contrary, you’re contributing to the success of the coin by dedicating your personal resources to increase the total hash rate. It’s not a denial of service, it’s explicitly providing the mining service that the coin is asking its participants to provide. Now using that temporary hash rate imbalance to issue an explicit double spend attack could be considered fraud. But that’s a totally separate.” Litecoin Cash and Others are Susceptible Despite the emotions, the hack will happen on Oct 13 but it could open up a Pandora’s box. Data from Crypto51 theorizes what it will cost to launch a 51 percent on a blockchain network. Should users buy hash rates from NiceHash and dedicate salvos at Bitcoin Interest, Litecoin Cash, PACcoin and Feathercoin, then it will cost them less than $200 to completely hard fork these chains. Do you think the attack will be successful? Is Piracy1 acting Maliciously? Let’s know in the comment section below. The post It Costs $20 to Launch a 51 percent Attack on Einsteinium and Less than $200 to Force a Hard Fork in Feathercoin appeared first on Ethereum World News.
Ethereum World News

‘Real Risk’: Blockstream Exec Warns Over Bitcoin Cash 51 Percent Attack

Bitcoin Cash (BCH) average hashrate over the past week has fallen below 8 percent of Bitcoin’s (BTC), while Blockstream compares the altcoin to a five-year-old Litecoin hard fork.  Feathercoin? Is That You? In comments on Twitter today, Blockstream VP solutions lead Warren Togami sounded the alarm over BCH — warning its low average hashrate placed investors at risk of double spend attacks from malicious parties. According to Togami, there currently exists a “real risk” of double spending, which would have a paralyzing effect on exchanges and buckle BCH’s already low liquidity. Togami had previously issued admonitory words on the altcoin in May, when hashrate circled 12 percent of Bitcoin and exchanges were crediting BCH transactions after just one network confirmation, a move he described as “terribly dangerous.” Now, the state of the BCH network is reminiscent of Feathercoin — a project which forked off from Litecoin in April 2013, only to lie dormant for several years afterward. Launching with a price just under $0.50 per token, after a 51 percent attack in June the same year, FTC collapsed, becoming worth less than one cent for the next three years. Historic parallel from 2013https://t.co/jUXqar7fzO1/ FTC forked from LTC, competed for scrypt hashes.2/ Like BCH, incompetent dev.3/ Experienced crippling diff swings, added difficulty smoothing.4* Huge reorg attack.5* "Solved" problem with centralization.* = Next for BCH? — Warren Togami (@wtogami) September 4, 2018 Centralization And ‘Incompetent Dev’ For Togami, the “parallels” with BCH are clear. “FTC forked from LTC, competed for scrypt hashes,” he continued, adding that “like BCH,” FTC had an “incompetent” developer. The difficulty volatility BCH has also grappled with marks a further similarity, along with the fork’s increased centralization relative to its genesis. A double spend attack, Togami considers, could be next. Well-known figures at Blockstream have often taken an active stance in rebuking Bitcoin Cash developers and proponents for their claims of superiority over Bitcoin itself. As Bitcoinist reported, CTO Samson Mow took US exchange Coinbase to task in July when it emerged an internal investigation into insider trading of BCH had found no evidence of wrongdoing. What do you think about Warren Togami’s appraisal of Bitcoin Cash? Let us know in the comments below!  Images courtesy of Shutterstock, Twitter. The post ‘Real Risk’: Blockstream Exec Warns Over Bitcoin Cash 51 Percent Attack appeared first on Bitcoinist.com.
Bitcoinist

Strike Three? Verge Suffers Third Suspected 51 Percent Attack

Verge (XVG), the privacy-focused cryptocurrency is the news once again as unconfirmed reports suggest that it has fallen victim to another 51 percent attack. If proven to be true, it will be the third of such attacks on the crypto’s blockchain since April. The previous two attacks resulted in the theft of $1 million and $1.8 million respectively. Details of the Suspected Hack On May 27, a Bitcointalk forum poster with the moniker “CHIEF56” called attention to a Verge blockchain address with some “odd” transactions. Upon closer examination, these transactions appeared to have strange timestamps that couldn’t be found on other explorers, signaling the possibility of an ongoing double spend attack. Other members of the forum posted addresses tied to the first hack, with some of them showing negative balances. According to CHIEF56, one of the addresses holds a total of 142,853,089 stolen XVG tokens. On May 29, “Ocminer,” the forum poster who identified the first attack in April, confirmed that there was indeed an attack. However, a look at the data provided by the Verge network shows no drop in difficulty for any of the five mining algorithms. The previous two attacks have taken control of mining algorithms to hijack the mining of blocks on the blockchain. XVG proponents point to the absence of abnormal block production rates in the last one week as proof that there hasn’t been any attack since May 22. At the time of this writing, no smoking gun evidence other than the assertions of a few Bitcointalk users has been provided. Bitcoinist will continue to monitor the situation. A Multitude of Problems Even if the reports of a third 51 percent attack turn out to be untrue, XVG is already facing a multitude of problems. Two confirmed high profile attacks using essentially the same method in the space of two months does not inspire confidence. After the second attack, the Verge development team created a patch to prevent further exploits. However, reports indicate that the patch was allegedly copied from Shield Currency, a little-known coin launched in November 2017. Some commentators say the “fix” is inadequate to solve the hacking problem. Weiss Cryptocurrency Ratings recently scored XVG a D+ and C- in both commercial and technical parameters, respectively. The price of XVG has dropped by more than 50 percent in the past month. Has Verge fallen victim to yet another 51 percent attack?  Can the beleaguered cryptocurrency recover from its latest travails? Let us know what you think in the comments below. Images courtesy of Verge Network, CoinMarketCap, AdobeStock The post Strike Three? Verge Suffers Third Suspected 51 Percent Attack appeared first on Bitcoinist.com.
Bitcoinist

51 Percent Attack: Hackers Steals $18 Million in Bitcoin Gold (BTG) Tokens

Murphy’s Law states that “whatever can go wrong, will go wrong.” For Bitcoin Gold (BTG), this epigram appears to be spot on as the network recently fell victim to the dreaded 51 percent attack. Forensic Analysis of the BTG hack On May 18, Edward Iskra, the BTG communications director alerted the crypto community to the attack via a blog post on the Bitcoin Gold forum. According to Iskra: An unknown party with access to very large amounts of hashpower is trying to use ‘51% attacks’ 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 51 percent attack is no mean feat, even on a small blockchain as a significant amount of computing power is required to pull it off successfully. However, if an attacker were able to hijack a blockchain, combining it with a double-spend would monetize the effort, and this is precisely what the suspected BTG hacker did. The image above is the Bitcoin Gold address of the suspected hacker. The attacker sends a particular number of BTG tokens to an exchange, trades them for another coin and makes a withdrawal. The hacker then returns those same coins in his/her wallet, hence the double-spending problem. Thus, the attacker can spend and hold the same coins at the same time. Looking at the image above, if all 76 transactions were indeed part of the hack, then the hacker has stolen about $18 million based on the current BTG price. 51 Percent Attacks are All the Rage Now There have been no transactions since May 19. However, the hacker could theoretically continue the attack, especially if they still control 51 percent of the blockchain. According to Iskra, the onus is on exchange platforms to be vigilant against such attacks. He also urged them to increase the number of confirmations for large deposits. The BTG communications director also added: There is no risk to typical users or to existing funds being held. The only parties at risk are those currently accepting large payments directly from the attacker. Exchanges are the primary targets. Bitcoin Gold joins Verge and Monacoin as blockchains hacked within one crazy week for cryptocurrency networks. The Verge attacker gained control of two of the five mining algorithms, successfully mining 35 million XVG tokens valued at $1.75 million in only a few hours. Can BTG overcome its present predicament? Let us know your thoughts in the comment section below. Images courtesy of Twitter/@mentalnomadsays, BTG Explorer, Pexels The post 51 Percent Attack: Hackers Steals $18 Million in Bitcoin Gold (BTG) Tokens appeared first on Bitcoinist.com.
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Ravencoin Grows 20% And Continues to See RVN Token Surge in the Crypto Market

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Bitcoin [BTC] Futures in good stead against its Spot equivalent: Bitwise Report

Bitcoin [BTC] Futures were thought to be a snippet of the overarching cryptocurrency market, though meager in comparison to the larger spot market. A recent report from Bitwise Asset Management, the crypto-centric investment firm has stated otherwise. In a March 20 report presented to the United States’ Securities and Exchange Commission [SEC], Bitwise analyzed the Chicago Mercantile Exchange [CME], and the Chicago Board Options Exchange, with ten prominent cryptocurrency exchanges’ in terms of their trade volume. Prior to shedding light on their Futures versus Spot findings, it must be noted that the report revealed that 95 percent of the trading volume of unregulated exchanges were seemingly “fake and/or non-economic wash trading”. Taking into account this disparity, the percentage of futures volume to their spot equivalent increases from 1.51 percent to 33.33 percent. Reported Spot volume totaled $6 billion, but after removing the “suspicious exchanges”, the actual volume recorded dropped to $273 million, in comparison to the futures market volume of $91 million. Furthermore, the increase in futures’ volume as a percentage of the spot market has been steadily increasing. From November 2018 to January 2019, the futures market was just over 15 percent, and almost doubled in February 2019 to 33 percent. Since the Futures contracts were approved in December 2017, only on two occasions did the Futures volume, in comparison to the Spot market, shoot above 20 percent; this was in May and August 2018. Futures Volume expressed as a percentage of their Spot Equivalent In terms of their stand-alone trade volume, the CME and the CBOE are in good stead against the world’s top cryptocurrency exchanges. The daily volume the CME, which brings in $84.82 million, ranks second behind Binance’s $110.5 million and ahead of Bitfinex, which records $38.06 million in daily trade volume. The CBOE also fairs well, taking the ninth spot on the ladder, ringing in $6.12 million in daily trade volume. Gemini takes the eight spot with $8.11 million and itBit caps off the top-10 with $5.58 million in daily volume. Notable, among the top-12, eight exchanges are registered within the United States. Despite the CBOE’s comparative success against the spot exchanges’, it has not been performing well against its cross-town rival, the CME. This slump forced the CBOE to delist their Bitcoin Futures [XBT] for March 2019. However, the XBT futures that are yet to expire later in the year will not be off-loaded prematurely. Bitwise also points out that the CME Futures Price tracks the Global Spot Price based on an arbitrage model. Given below is a chart attesting the same: Arbitrage between the CME Futures price and the global Spot price The post Bitcoin [BTC] Futures in good stead against its Spot equivalent: Bitwise Report appeared first on AMBCrypto.
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How Cryptocurrency Trading Volume Fiasco Can Lead to Bitcoin ETF Approval

The SEC has held the ETF approval for Bitcoin and Cryptocurrency for a couple of reasons. The most significant reason for the same has been the unregulated marketplace. While decentralization in Bitcoin is an attribute that makes it an ideal asset class, the market places or Exchanges that provide for conversion of FIAT to Cryptocurrency is still controlled by independent entities. A recent report by Bitwise Asset Management published by the SEC inferred that more than 95% of the cryptocurrency volume is being faked. Hence, according to that, the ‘actual spot volume’ on cryptocurrency exchanges is a little above $270 million. Moreover, the reported volume of CME and Cboe Bitcoin Futures is more than one-third of the ‘actual spot volume’ estimated by Bitwise. According to Bitwise Asset Management, This is good news because it means CME— a regulated, surveilled market— is of material size, which important for an ETF. The case of a Bitcoin ETF Approval Now CME Bitcoin Futures reported a spot trading volume of $85 million. Moreover, according to Bitwise Asset Management, the actual trading volume of the Crypto-to-FIAT Exchanges is around $273 million. Hence, according to this statistic the Futures Trading Volume of CME alone accounted for 31.1% of the ‘Actual Exchange Volume.’ Moreover, there are other Bitcoin Futures market active in Europe and Japan as well. Hence, going by the above statistic, it can be said that the institutional investment might be in parity with the unregulated investment in Bitcoin. However, the Exchanges have reported total spot volumes total to the tune of $6 billion. This can necessarily raise doubts on its demand being higher than $100 billion. However, it does not directly affect the total market capitalization of a cryptocurrency.   Parity Between Spot Trading of Bitcoin and Gold The spot trading volume of Gold is 0.55% of its total market capitalization, while according to Bitwise statistics spot ‘actual spot trading on Bitcoin is 0.39%. If the CME Futures volume is included in this data, the percentage will increase to 0.51%. The OTC trading volume on most exchanges is also not added in the Exchange Data. All this suggest that the institutional investment in Bitcoin is considerably more significant than one expects. It is not only healthy in volume but also agrees statistically with the closest relatable asset class, i.e., Gold. Hence, a new form of informational mechanics for the trading of Bitcoin and Cryptocurrency in regulated Exchanges could alleviate the doubts around the Bitcoin ETF approval.   The post How Cryptocurrency Trading Volume Fiasco Can Lead to Bitcoin ETF Approval appeared first on Coingape.
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Top 5 Crypto Performers Overview: ONT, ADA, ETC, BCH, IOTA

Top 5 Crypto Performers Overview: ONT, ADA, ETC, BCH, IOTA The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision. The market data is provided by the HitBTC exchange. […] Cet article Top 5 Crypto Performers Overview: ONT, ADA, ETC, BCH, IOTA est apparu en premier sur Bitcoin Central.
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