What is a 51% Attack?

C O N T E N T S:

KEY TOPICS

  • Last week, the privacy coin Verge (XVG) experienced a 51% attack against its network, with a mining party invalidating legitimate blocks and using fake timestamps to trick the network and enabling the attacker to successfully mine an estimated 35m XVG tokens in the space of a few hours.(More…)
  • For the second time in as many months, the popular privacy coin Verge has fallen victim to a 51% attack on its network, with attackers netting 35 million XVG, worth around $1.75million at the time of the attack.(More…)
  • Because all these networks use the same protocol, miners that have either established a significant amount of hashing power on a compatible and larger coin’s network (meaning they have a lot of equipment already dedicated to mining the larger coin but not necessarily enough to attack it), or someone who has rented enough equipment, could easily point their mining power for four hours at a small compatible network and assert a 51% attack there.(More…)
  • The website recommends interchain linking and building coins on top of other networks such as ERC20 as another possible solution in preventing the 51% attack.(More…)
  • A 51% attack happens when hackers gain control of more than half of the mining power on a cryptocurrency network, allowing them to tamper with the blockchain ledger where transactions are recorded.(More…)

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  • Though, the attack on verge was a bit different since the attacker exploited insecure rules to confuse the network into giving him or her money.(More…)
  • Both the most recent attack and the early April attack involved one or more of these mining algorithms being hacked by the attackers to mine blocks extra fast and a bug in the Verge system allowing attackers to attach invalid timestamps to blocks, effectively tricking the network into accepting the unnaturally fast blocks as valid and rejecting all other legitimately mined blocks.(More…)
  • This raises the cost of attacks because a miner must control 51 percent of the network for a longer period of time.(More…)
  • A 51 percent attack is said to be imminent when an individual (not likely) or a group of people join forces to control more than 50 percent of the mining power of a blockchain network.(More…)

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What is a 51% Attack?
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link: http://www.crowdfundinsider.com/2018/06/134560-zencash-cryptocurrency-hacked-in-51-attack/
author: crowdfundinsider.com
description: Privacy Crypto ZenCash Hacked in 51% Attack | Crowdfund Insider

KEY TOPICS

Last week, the privacy coin Verge (XVG) experienced a 51% attack against its network, with a mining party invalidating legitimate blocks and using fake timestamps to trick the network and enabling the attacker to successfully mine an estimated 35m XVG tokens in the space of a few hours. [1] Verge, a “privacy coin” known for the zealous nature of its community, fell prey to a 51% attack when a malevolent miner was able to gain a majority control of the network’s hash rate, which made it possible to control and alter transactions. [2] According to his blog post published on Medium, Abboud argues that 51% attacks are far more likely because many networks now share the same hashing algorithm, especially cryptocurrencies like Ethereum Classic (ETC) and Bitcoin Cash (BCC), that have hard-forked from larger networks. [1] Larger cryptocurrencies such as bitcoin and ethereum are harder to 51% attack because they’re much larger, requiring more hashing power than NiceHash has available. [3]

A 51% attack would almost certainly not grant its perpetrators the ability to create new coins or make changes to old blocks, so a 51% attack would most likely not bring an end to bitcoin or other blockchain-based currencies on its own even if it can be extremely damaging. [2] Coins that would allow CPU mining are also realistic defense mechanisms against 51% attacks. [2] At the current network mining difficulty levels, not even major governments could mount a 51% attack without serious difficulty. [2] Verge experienced a 51% attack back in April and since then the network has lost over half of its value: there are reports still unconfirmed that Verge was attacked yet again in the last couple of days. [1] The development of a more decentralized network with a greater number of individual miners would be able to provide a strong base for defense against the chance of a 51% attack. [2] What’s a 51% attack? It’s when a single miner controls more than half of the hash power on a particular blockchain. [4] As a data point for this, someone even erected a website Crypto51 showing how expensive it is to 51% attack various blockchains using a mining marketplace (in this instance, one called NiceHash). [3] There is even a website, crypto51.app, where the hourly cost estimates are published to bring a 51% attack to the various cryptocurrencies. [5] Crypto51.app is a new website that tracks the theoretical cost of launching a 51% attack on a Proof of Work coin. [6]

51% attacks are still troubling since they can still be worthwhile sometimes, impacting exchanges or whoever happens to be in the crosshairs of the attacker. [3] The exotic-sounding coins Monacoin and Electroneum have also suffered from 51% attacks not too long ago. [4] The prospect of 51% attacks on Proof of Work cryptocurrencies is on the rise, and a threat for which the cryptocurrency community is woefully unprepared. [1] More surprising, though, may be that so-called 51% attacks are a well-known and dangerous cryptocurrency attack vector. [3] Though a 51% attack is perhaps the most famous cryptocurrency attack, it’s not necessarily the worst in his mind. [3] Krypton and Shift, blockchains which work on Ethereum, were victims of 51% attacks in August 2016. [2] Although this gives flexibility in switching between different cryptos, it also means that miners with larger net hash rates could easily move into smaller networks and successfully stage a 51% attack. [1] Only today, May 29, verge is reported to have suffered its third 51% attack. [6] A 51% attack is certainly possible – especially given the rise of mining pools (groups of individuals who mine together as a single unit). [2] Which Proof of Work coin would you 51% attack if you had the hashpower? Let us know in the comments section below. [6] Double spending is not the only damage that can cause a 51% attack, but it is by far the most common purpose of this type of operation. [5] The more confirmations there have been, the harder the funds are to steal in a 51% attack. [3]

Recently, there have been several “51%” attacks on different cryptocurrencies. [5]

For the second time in as many months, the popular privacy coin Verge has fallen victim to a 51% attack on its network, with attackers netting 35 million XVG, worth around $1.75million at the time of the attack. [7] Verge, a “privacy coin” known for the zealous nature of its community, fell prey to a 51% attack where a malevolent miner was able to gain a majority control of the network’s hashrate, a which made it possible to control and alter transactions, which affects the integrity of the entire blockchain. [8] Statistics from the website 51Crypto reveal the cost it takes to perform a 51% attack on specific cryptocurrencies. 51% attacks occur when a malicious party takes control of over 50% of a network’s power, which then enables them to damage the blockchain through double spends and creating forked chains. [9] A website has been created that estimates the cost of a 51% attack on different cryptocurrencies, allowing attackers to maliciously double spend, meaning to spend the same balance twice. [10]

A 51% attack is theoretically possible on Proof of Stake systems as well, but the attackers would need to buy approximately half of the coin supply (an action that would cause the price to steadily increase as they bought up more coins), making it very expensive and also very difficult to estimate the true spending power required. [10] The methods employ a cost calculation model for 51% attacks known as Rindex v2.0, which removes aspects such as purchasing new equipment in favor of “leasing” hashpower from other PoW coins, such as Bitcoin (BTC) and Ethereum (ETH). [11] Performing a 51% attack on Bitcoin for just one hour would cost $550,000, and an attack on Ethereum costs $360,000. [9] For this reason, established Blockchains such as Bitcoin and Ethereum would require billions in terms of investments in computing power for any one entity to manage a 51% attack. [12] A 51% attack means an attack on a blockchain by miners who would take control over 50% of the network’s mining hashrate, or computing power. [8] A 51% attack enables attackers to control the “hash rate” of a currency and spend the same funds twice and fork the blockchain into two, creating different records. [10]

Other recent victims of a 51% attack include Bitcoin Gold (BTG), where a concerted effort to double-spend transactions bound for exchanges undermined trust in the network. [13] Although Digibyte’s multi algorithm makes a 51% attack more costly and difficult to do. It will not prevent a very sophisticated attack targeted at the few pools maintaining the majority of Digibyte’s network hashing power. [12] The larger mining groups are able make use of specialist ASIC mining rigs and ASIC-resistant algorithms or coins that would allow CPU mining are also realistic defense mechanisms against 51% attacks. [8] In another example of blockchain vulnerability, Mona Coin (MONA) saw trouble with block production, in what experts believe was a 51% attack. [13] The debate around the possibility of a 51% attack on most if not all coins have been ongoing in the crypto-verse for quite some time. [12] The development of a more decentralized network with a greater number of individual miners would be able to provide a strong base for defence against the chance of a 51% attack. [8] NiceHash only has access to 2% of Bitcoin’s network, so a 51% attack through them is impossible, but GameCredits’ capacity is much higher. [9] The use of the NiceHash service to cut costs makes it staggeringly easy for anyone in the know to attack a crypto-network, making the smaller Proof of Work coins extremely vulnerable, raising the question of why 51% attacks don’t happen more often, or indeed, whether they do and we just don’t know about it. [10] While other websites have much higher estimates for the cost of a 51% attack, they did not factor in the possibility of renting the mining equipment instead of buying it. [10] With more hashing power on board, a 51% attack, or mining exploits, are a possibility for many digital assets. [13] Both Verge and Bitcoin Gold suffered a successful 51% attack just a week ago, with Bitcoin Gold losing $18 million to double spending. [10] The past few days have been nothing but turmoil for the XVG community especially when news broke out on Tuesday that Verge (XVG) had succumbed to a 51% attack. [12] The Verge has reportedly suffered three 51% attacks this year. [14] “We can safely estimate The Cost of a 51% attack on Ethereum Classic today to be between 55 to 85 million (averaged $70 million),” Abboud reported. [11] Last week, a hacker exploited a vulnerability that had caused the previous 51% attack to decamp with $35 million worth of its cryptocurrency. [14] For now, there appears to be no imminent threat of a 51% attack on Bitcoin itself–in large part because of the size of the network–but other smaller networks could be more exposed. [15] Up until recently, a 51% attack on bitcoin was considered an impossibility. [14] A conversion to the Proof-of-Stake consensus may also help. 51Crypto does not list data for Proof-of-Stake coins, but they allow for higher parameters to be set for 51% attacks. [9] One of which is Bytecoin, as it only costs $557 for a one-hour 51% attack. [9] Bitcoin gold is the latest crypto to suffer from a 51% attack. [14] If the figures on the website are accurate the implications are huge, and a great many altcoins need to reconsider their security with the possibility of a 51% attack in mind. [10] On August 1, 2017, Mario Dian worked out his calculations for 51% attacks, where he did include the use of electricity and equipment. [9] All altcoins may be vulnerable to a 51% attack, experts believe. [13]

Basically, a 51 percent attack is an attack on a Blockchain network whereby the hacker is able to control the blocks on the Blockchain by having 51% control of the mining capacity of the entire Blockchain network. [12] The threat is known as a “51% attack” because it stems from a malicious actor obtaining more than half of the mining power on a cryptocurrency network. [15]

The hacking incident, which was reported in a blog post earlier this month, is significant because it shows how a so-called 51% percent attack, which poses an existential threat to any Bitcoin-like currency, is not just a theoretical concern. [15]

Because all these networks use the same protocol, miners that have either established a significant amount of hashing power on a compatible and larger coin’s network (meaning they have a lot of equipment already dedicated to mining the larger coin but not necessarily enough to attack it), or someone who has rented enough equipment, could easily point their mining power for four hours at a small compatible network and assert a 51% attack there. [16] Fortunately, as prices increase so do incentives for mining, which increases hashrates and thus strengthens the security of the network against 51% attacks. [17] After the attack, Zen Cash issued the same type of reassurances offered by Bitcoin Gold and Verge last week when those networks, as well as MonaCoin, also succumbed to 51% attacks. [16] Both Bitcoin Gold and Verge have recently suffered different types of 51% attacks compromising the security of their respective networks. [17]

Verge responded by hard-forking their blockchain, however, the 51% attack was repeated just last week when hackers added a second algorithm to exploit the same vulnerability previously used by the attackers. [18] Last month, a Bitcointalk forum user “ocminer? announced Verge was experiencing a similar 51% attack due to a bug in its code which enabled attackers to spoof timestamps enabling the hacker to repeatedly use the same mining algorithm to mint blocks. [19] The privacy-focused cryptocurrency Verge, is quickly becoming a running joke within the cryptocurrency industry, after repeatedly suffering 51% attacks and having hackers exploit a vulnerability that’s led to millions of dollars in Verge tokens being stolen. [18] Executing a 51% attack on the BCH network will cost you just around 250 BTC, or $2 million, per day. [20] ZenCash also claimed, “A 51% attack or double spend is a major risk for all distributed, public blockchains,” glossing over the fact that small, cloned networks like ZenCash are much more vulnerable. [16] The hacker gained enough hash power to perform a 51% attack on the network and double spend. [21] “The ZenCash network was the target of a 51% attack on 2 June at approximately 10:43 pm EDT. The ZenCash team immediately executed mitigation procedures to significantly increase the difficulty of future attacks on the network. [22] The Proof of Stake system could theoretically be subjected to a 51% attack as well, but attackers would need to purchase and stake approximately half of the total coin supply. [23] The classic 51% attack scenario model accounts for the attacker having to acquire hardware, set up infrastructure, and pay electricity costs. [20] Other sites have tackled the 51% attack cost estimates before, but with a fatal flaw: They assumed the attackers were buying the hardware, when really it can just be rented remotely. [23] “We can safely estimate the cost of a 51% attack on Ethereum Classic today to be between $55 to $85 million.” [16] Recent chainges in crypto markets, says Abboud, like the creation of numerous hedging products and the availability of leveraging, have made even a 51% attack on large crypto networks more feasible. [16] These features incentivize them to stay on the network and keep hashrates high during price decreases and thus further maintains network security against 51% attacks. [17] It started back in April, when Verge suffered a small 51% attack that resulted in 250,000 XVG being stolen by hackers. [18] Today, the prominent BitcoinTalk ocminer user who discovered the last two attacks, is reporting that Verge has yet again suffered a 51% attack. [18] Verge also recently came under a type of 51% attack and it was its second attack in a couple months. [17] This website is intended to bring light to the risk of 51% attacks on smaller cryptocurrencies. [24] In recent weeks there have been a number of 51% attacks including a high profile attack against Bitcoin Gold a few days ago where $18 Million was stolen. [24] Performing a 51% attack can be a lot of work, time, and money to pull off successfully. [21] Some PoW currencies are using the same mining algorithms as their larger counterparts, making it much easier to hack the smaller networks with a 51% attack. [20]

At least five 51% percent attacks have been performed on cryptocurrencies in the past few months involving some notable names such as Verge and Bitcoin Gold, but most cryptocurrencies in the top ten have a large enough hash rate that attacking them would be way too expensive to justify. [20] There are quite a few ideas in the pipeline that could make 51% percent attacks near impossible in the future as well. [20]

The website recommends interchain linking and building coins on top of other networks such as ERC20 as another possible solution in preventing the 51% attack. [25] The website calculates the cost of renting enough hash power to undertake a 51% attack on a cryptocurrency network. [25] A 51% attack allows the attacker to control the hash rate of a cryptocurrency and spend the funds twice. [25] Proof of stake systems prevent the 51% attack as in order for the attackers to have more than 50% of the hashing power they will have to purchase more than half of coin supply. [25] This shared algo vulnerability has actually been known for quite some time with Luke-Jr, a Bitcoin Core developer and a Blockstream employee, performing a 51% attack on a coin that shared an algo some six years ago or so in or around 2012. [26] It would cost just $915 to 51% attack Bitcoin Private right now. [27] Recently, there have been series of 51% attacks on cryptocurrencies such as Verge and Bitcoin Gold, which saw Bitcoin Gold lose over $18 million. [25] Bitcoin Gold was hit with a 51% attack in the last few days, with the attacker hitting BTG with a double spend attack that allowed the hacker/s to steal up to $18 million. [28] Bitcoin Gold has become the biggest public blockchain to experience a 51% attack with 388,201 BTG stolen, amounting to some $17.8 million at the current price. [26] Both Verge and Bitcoin Gold have been hit by 51% attacks, revealing just how vulnerable the vast majority of altcoins are to similar methods, and possibly indicating the start of a trend. [29] In early April, the privacy orientated coin Verge suffered a scare regarding a 51% attack. [29] Estimates suggest it takes about $200,000 a day to 51% attack BTG, and around as much to 51% attack ETC which likewise shares the same mining algorithm as a far bigger coin, Ethereum. [26] Well, during the attacking period ownership might change, say if A sent you coins then they might vanish from your wallet and show up in A’s wallet again, so transacting during this period or accepting coins while a 51% attack is ongoing is very unsafe. [26] A miner will earn more money from mining BTC rather than mining BCH. Performing a 51% attack on BCH isn’t really worth it; all you can get is possibly some double spends, and less value in BTC. [30] Another altcoin apparently has suffered a 51% attack last month, at the same time as Verge Electroneum. [31] This has done more than make enthusiasts turn a cold shoulder towards Verge, it’s brought into question the ability to attack all other coins using the 51% attack. [29] For a 51% attack to work, hackers will try to deposit large amounts to an exchange and quickly trade it for some other coin. [31] “This website is intended to bring light to the risk of 51% attacks on smaller cryptocurrencies. [27] We are constantly hearing about the risks of a 51% attack in relation to some of the smaller cryptocurrencies and there have definitely been flutters within the community regarding the issue. [29]

Bitcoin Gold announced on May 18 it was being targeted by a 51% attack, too. [31] Basically, a 51% attack is reverting back time, or going back in time or history. [26] The distribution of the pool is important to reducing the risk of the attack, and as long as the mining pools remain reasonably distributed, this makes it very difficult to perform a 51% attack. [29] The OP is referring to two case-studies, of which only one was an actual 51% attack. [32] Although this is not the 51% attack scenario that we usually talk about, I think it is a little pedantic to quibble over whether it was a 51% attack or not. [32] Although it’s actually pretty easy to say that Ripple acts like a token constantly under 51% attack; because, well, it is constantly under a 51% attack. [29] On May 22, Suprnova alerted its followers to a 51% attack on Verge’s chain. [31] Expect to read about more 51% attacks, before any clear solution is worked into the system. [29]

The BTG development team confirmed the attack took place, with the attacker controlling over 51% of the network’s hashrate, using that to reorganize the blockchain and reverse transactions. [28] “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. [26] A final point to make is that Ethereum’s Casper FFG Proof of Stake layer on top of Proof of Work should make such splits far more difficult, and thus the chain more secure, as you’d need to own 51% of the coins to attack, which makes it very much pointless because you’d be losing all that 51% wealth if one can even get it. [26]

A 51% attack happens when hackers gain control of more than half of the mining power on a cryptocurrency network, allowing them to tamper with the blockchain ledger where transactions are recorded. [33] Regrettably, a 51% attack against cryptocurrency networks can be a startlingly easy endeavor, since hashpower can be hired from “cloud mining” firms and hackers can pay for control of the majority of the blockchain. [34]

A 51% attack is unlikely to ever hit bitcoin because of the large size of its blockchain, but cryptocurrencies with small networks are vulnerable. [33] Something to be aware of is that the cost of a 51% attack varies per coin, with Bitcoin being the most expensive to attack (as it has a very high hashrate). [35] It’s also possible that their 51% attack fails, if the main chain happens to be quick enough to build the longer chain? in that case, the honest miners don?t have their mining reward stolen? and the attacker doesn?t get their 1,000 BTG back. [36] A coin can hard-fork to a new mining algorithm (if they use one that isn’t shared with other coins or ASIC miners, this can be a good way to deter 51% attacks, although if the attacker is using CPUs/GPUs this may not help). [35]

To execute a 51% attack, hackers would have to gain more than half of the network’s mining total hashrate this means that the hacker would need to gain the majority of the total the computing power that users on a blockchain execute at a given time. [34] Because, in theory, I could get a loan of a bunch coin, rent enough computing power for a 51% attack with that coin, short the coin, double (triple?) spend the coin, and then buy the coin I need at a reduced price after the market responds to the shock. [37] While the possibility of a 51% attack is nothing new, the chance of attacks occurring had been considered highly unlikely as more and more people joined cryptocurrency networks, making it harder to get control of over half a network. [33] A 51% attack means that some entity can effectively control the whole network and all transactions. [37] A few hours ago, Charlie Lee, creator of Litecoin and known for being an XVG skeptical, announced that somebody was carrying out a 51% attack on the network. [38] Cryptocurrency networks are under multiple threats on a near-constant basis One of the biggest concerns is the so-called 51% attack. [39] Investing.com – A hacking attack on Bitcoin Gold reported last month shows that a so-called 51% attack, a menacing scenario for any cryptocurrency, is no longer just a theoretical risk. [33] Bitcoin Gold (based on Equihash at time of the attack) was hit with a 51% attack against block 528735. [35] Verge (based on 5 mining algorithms at time of the attack) was hit with a 51% attack. [35] Apparently, a possible 51% attack would have been carried out, something that was denied by important personalities within the Verge ecosystem, clarifying that it was a DDoS attack. [38] A 51% attack is where a malicious individual or group controls more than 51% of the hashpower for a proof-of-work coin (a similar scenario can also occur for proof-of-stake, but we focus on proof-of-work below). [35] While a 51% attack is happening, if you hold the associated coin on a wallet you control, you don’t really need to worry. [35] Holders: if you hold your coins on a centralised exchange/wallet, if that exchange/wallet is affected by the 51% attack they may lose a lot of money, and potentially forward this loss to their users (similar to where when exchanges are hacked they sometimes absorb losses by taking away from user balances). [35] Any payments made during a 51% attack may be invalid (e.g. after the attack is over you might lose the received coins). [35] Assuming your plan is renting general purpose GPUs on a computing cluster Maximum Bitcoin Total Bitcoin Hashrate is 43EH/s http://blockchain.info/es/cha. (E stands for Exa 10^18) For a 51% attack, starting from 0, you’d need to add another 43EH/s to the pool. [37] Abboud said, “We can safely estimate The Cost of a 51% attack on Ethereum Classic today to be between 55 to 85 million (averaged $70 million),” Abboud reported. [40] If they tried to abuse their position to execute a 51% attack the miners would either shut down their hardware or jump ship to another pool and the misbehaving pool would no longer control 50% of the hash rate. [37] The main potential gains from a 51% attack are (1) trashing of a blockchain, primarily reducing its credibility, or (2) double (triple?) spending. [37] At least three other virtual currencies have suffered 51% attacks in the last two months, including Verge and Monacoin. [33] Many sites make a big deal of 51% attacks, but unless they’re sustained for a significant amount of time, only specific people & services are affected by them. [35] Electroneum (based on CryptoNight at time of the attack) was hit with a 51% attack. [35] Monacoin (based on Lyra2REv2 at time of the attack) was hit with a 51% attack, estimated to have caused around $90k in damages. [35] Litecoin Cash (based on SHA-256 at time of the attack) was hit with a 51% attack. [35] ZenCash (based on Equihash at time of the attack) was hit with a 51% attack. [35] In May & June 2018, there have been many 51% attacks mentioned on various news websites. [35] In defusing a 51% attack, prevention is far easier than cure. [34] A lot of people want to know how Double-Spend / 51% attacks work. [36] A classic way of a successfully executed 51% attack is in the form of a “double-spend” attack. [34] There’s nothing about a 51% attack that involves breaking cryptography. [37] This guide will go through what a 51% attack is, and a timeline of the May/June 2018 attacks. [35] This is called a ‘double spend’, and is a form of 51% attack. [35] We’ve heard of 51% attacks, and how awful they can be for altcoins, but we don’t often hear about what that means. [34]

Miners on other coins running the same algorithm can temporarily mine the coin under attack to try and decrease the attacker’s hashpower to less than 51% (although this may just offload the attack to another coin). [35]

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Though, the attack on verge was a bit different since the attacker exploited insecure rules to confuse the network into giving him or her money. [3] Since an attacker must spend coins in his or her possession, and can’t conjure up new coins, the attack is somewhat limited. [4] Ever since verge was attacked twice in two months, in between successful attacks on bitcoin gold, monacoin, and possibly electroneum, miners have been on the lookout for signs of another attack. [6] Even if a miner was able to accrue such a high percentage of hashing power, the collapse in the network’s value following a consensus attack as investors hurriedly sold their coins would provide little incentive: known as the Nakamoto consensus. [1] “If your savings are in a coin, or anything else, that costs less than $1 million a day to attack, you should reconsider what you are doing,” tweeted Cornell professor Emin G Sirer. [3]

“Bitcoin is too big and there isn’t enough spare bitcoin mining capacity sitting around to pull off the attack,” Bonneau told CoinDesk. [3] To launch such an attack on Bitcoin it would take more than $ 500,000 per hour, while for Ethereum more than $400,000 per hour. [5]

One could attempt this kind of attack with far less network control, but the chances of successfully pulling this off would be far slimmer. [2] “Hackers are now realizing it can be used to attack networks,” he said. [3]

Through three successful attacks of zencash (a lesser-known cryptocurrency that’s a fork of a fork of privacy-minded Zcash), the attacker was able to run off with about more than 21,000 zen (the zencash token) worth well over $500,000 at the time of writing. [3] This type of attack is carried out when a single subject, or a group of coordinated subjects, manage to reach or exceed the majority of the total computing power available to the miners of a cryptocurrency. [5] For cryptocurrencies that guarantee lower rewards for miners, the overall installed computing power is much smaller, so as to make such attacks possible. [5] Attacking bytecoin, for example, might cost as little as $719 to attack using rented computing power. [3]

Mining attacks on Proof of Work coins are cheaper and easier than ever. [6] The greater the number of past blockchain transactions, the more secure a particular blockchain would be against these types of attacks. [2] “Its just a matter of time before an investor gets in touch with a sizeable miner and rents their hashrate so as to stage an attack”, says Abboud. [1] Thanks to the availability of rentable hashing power, orchestrating an attack that would previously have required weeks of meticulous planning can be executed in minutes. [6] “I personally believe that big well-known mining pools will have difficulty doing this type of attack on smaller networks, despite the fact that they have the ability, as they may not wish to risk their reputation”, says Abboud. [1]

Purchasing of more than 50% of all the coins available on a network is normally far more expensive than trying to take control of 51% of the hashing power. [2] “The traditional methodology of calculating the cost of a 51% attackm ight be completely off for networks with a total hashrate significantly smaller than others that use the same hashing algorithm”, said Hussam Abboud, the managing partner of PDB Capital a crypto orientated VC firm based in Brazil’s Sao Paulo. [1] For a long time, the PoW consensus has long been defended as a workable model because the high upfront costs of buying and running the required number of mining rigs needed to stage a 51% would be prohibitively expensive. [1]

Hitting 51% network control is does not actually guarantee a successful network takeover. [2] Bytecoin has a $1 billion market cap and is a top 20 cryptocurrency, but could be 51% attacked for a mere $557 thanks to its choice of algorithm and low hashrate. [6]

Both the most recent attack and the early April attack involved one or more of these mining algorithms being hacked by the attackers to mine blocks extra fast and a bug in the Verge system allowing attackers to attach invalid timestamps to blocks, effectively tricking the network into accepting the unnaturally fast blocks as valid and rejecting all other legitimately mined blocks. [7] The Verge team confirmed the attack in a post on twitter mentioning that “some mining pools are under DDoS attack” and that the network was “experiencing a delay” in the mining blocks. [12] The attack came about as a result of a hacker managing to trick the Verge protocol and gaining 51 percent control of the network only to mine XVG at the least difficulty and make away with over $1million worth of XVG. [12] Increasingly, however, the attack, which involves a hacker gaining control of a majority of systems on bitcoin’s network and altering transactions on its blockchain, is becoming a plausible reality. [14] Repeated 51 percent attacks on proof-of-work (PoW) cryptocurrencies have triggered a critical dialogue about the security of blockchain networks. [41] As the website statistics show, the total renting capacity of NiceHash only amounts to 2 percent of the hashing power actually required to perform a 51 percent attack on Bitcoin for one hour; similarly for other cryptocurrencies — the hashing power available for rent through NiceHash is simply not enough for the major cryptocurrencies. [41] Reddit user xur17 has created crypto51.app, a website that tracks the costs of performing hourly 51 percent attacks on PoW cryptocurrencies. [41]

The hardware required to attack the Bitcoin network would cost over $1 billion, and hourly electricity costs over $500,000. [10] The Verge team has yet to address the vulnerability or the most recent attack, taking to Twitter only to mention the possibility of a DDoS attack on some mining servers and that the team is working on network issues. [7] It is a whole different case for verge as it is still a growing network vulnerable to such attacks. [12] Large networks have many nodes making them very expensive to attack due to the processing power required. [10] Cryptocurrency mining rigs are very expensive, and the hardware required to execute an attack on even a small coin with few mining nodes to compete with would be astronomical, requiring server farms full of top-tier rigs and the electricity required on top of that. [10] As reported on CNN the attack happened between block 2155850 and 2206272 as the hackers managed to mine over 30 million XVG coins in a matter of hours. [12] Hashing power is easily retargetable, so not only can people rent hashing power, the larger mining pools can redirect hashing power at smaller coins for a few hours to attack them.” [10] The website then lists the hourly attack cost based on the algorithm used, the hash rate for the currency, and the cost to rent hashing power. [41] “There was an attack against Bitcoin Gold a few days ago, which made me curious what the cost of an attack would be with rented hashing power. [10] The cost for the attacks comes further down if you account for the block rewards that the miners receive from mining. [41] The chief reason for the hashing power attacks is the presence of already large pools of mining tools available for all types of algorithms. [13] According to BitcoinTalk member “ocminer,? the attack takes advantage of a feature of the Verge mining protocol that was supposedly fixed by the development team following the first attack. [7] With activity such as the Bitcoin Gold and Verge hacks, investors are getting increasingly concerned about the difficulty it takes to perform such an attack. [9] The hacker has yet to strike again, however, possibly because further attacks could trigger a massive sell-off as Bitcoin Gold holders lose faith in the integrity of the network. [15] The Bitcoin Gold network still appears vulnerable to further such attacks. [15]

The attacks were previously considered highly unlikely due to financial constraints involved — however that claim has since then been invalidated, especially for cryptocurrencies with small networks. [41] The statistics, however, succeed in showing how vulnerable PoW cryptocurrencies are to network attacks, at the moment. [41]

I did the math and was honestly kind of shocked someone could attack a cryptocurrencies worth close to a billion dollar for < $10k an hour and even less than that if you include the block rewards. [10] Another thing to note here is that one hour is not actually enough to mine enough blocks for the attack to be profitable. [41] The Crypto51.app site claims that NiceHash could be used to take over the hash rate of the Bytecoin networkworth over $1 billion for an entire hour for under $600, with other coins vulnerable to multi-million dollar attacks for equally minuscule costs. [10] As per the website calculations, it will only take $2,990 to keep an attack going on Bitcoin Gold for one hour, $2,216 on Ethereum Classic, $1,124 on Bytecoin, and $3,345 on ZClassic. [41] As the website notes, the rewards can significantly reduce the attack cost — by up to 80 percent. [41] The website cumulates statistics from several sources to estimate the cost of the attacks. [41] The website only focuses on Proof-of-Work coins, but Proof-of-Stake coins are also subject to these types of attacks. [9]

Granted, one of the main reasons Bitcoin has remained at the throne of the crypto verse is that it has managed, over the years, to withstand attacks such as the 51 percent attack. [12] The far right column which indicates that NiceHash only has 2% of the hardware required to attempt an attack on the Bitcoin network shows that the service could successfully be used to attack smaller networks like Bitcoin Gold, Bitcoin Private, MonaCoin, Bytecoin, and many others. [10] Although critics saw the move as a mere temporary solution for the problem, the XVG community has responded to the attack by sticking together as the Verge team works its way around a solution. [12] Iskra’s post suggests that sustaining such an attack for a long period of time could turn out to be expensive for the hackers. [14] This makes them the two most expensive cryptocurrencies to perform an attack on. [9]

Anyone in control of 51% of the hash rate could, for example, send funds to an exchange and trade them for other coins, then use their hashing power to erase the transaction they just made, leaving them with the funds they sent and the funds they received. [10] There is the scenario where hashing power consolidates, or there is a cartel, or a hidden miner of more than 51% of the hashing power – a feat quite possible in a world where mining is an arms race of powerful ASIC machines. [13]

Additionally hitting 51% network control is does not actually guarantee a successful network takeover. [8]

This raises the cost of attacks because a miner must control 51 percent of the network for a longer period of time. [42] To leverage this into an attack, the malicious miner may send a payment to a merchant on the original blockchain while privately mining a blockchain that contains a transaction for the same coins, but to an address they control. [42] Accessing enough computing power to execute that kind of attack on large networks like Bitcoin or Ethereum would be really expensive–numerous firms dedicate warehouses filled with servers to mining those blockchains. [42] Larger network coins like Bitcoin and Ethereum would be very costly to attack. [21] The wave of 51 percent attacks has renewed fears in the cryptocurrency community that similar attacks may take down even larger networks, perhaps even market leaders Bitcoin and Ethereum. [42] While the hardware required to attack the Bitcoin network would cost $1 billion with hourly electricity costs of $500,000, other coins are not quite as secure. [23] NiceHash only has 2% of the hardware required to attack the Bitcoin network, but other currencies are well within reach. [23] When Bitcoin, the largest SHA-256 network was created nine years ago, its inventor believed that the Bitcoin network incentivized good behaviour by making it more profitable to cooperate than attack. [16]

Bitcoinist reports that the four hour attack on the small ZenCash network only cost the attacker about $30 000 USD. [16] A site recently popped up showing the cost to perform an attack like this called crypto51.app. Quite a few networks could be attacked for under $1,000 by renting space on NiceHash. [21] An example of the attack would be depositing the coin being attacked into an exchange, trading that coin to another, and withdrawing. [21] It’s possible that these firms could collude to execute the attacks themselves, but many argue that compromising the blockchain is not in cryptocurrency miners? best interest since it could wreck the value of the coin they were mining. [42] Although any blockchain secured with proof-of-work mining is technically vulnerable to the attack, smaller cryptocurrencies are especially so since less computing power is required to achieve 51 percent. [42] To execute the Bitcoin Gold 51 percent attack, the hacker created their own private Bitcoin Gold blockchain and kept the coins mined on this chain in their own wallet. [42] A wave of 51 percent attacks affecting Bitcoin Gold, Verge, and Monacoin resulted in nearly $20 million worth of cryptocurrency being stolen from exchanges this week. [42] The recent attacks on Verge, Monacoin, and Bitcoin Gold have reignited a debate in the cryptocurrency world about the threat posed by 51 percent attacks. [42] Only days after the Silicon Valley episode aired, though, a wave of 51 percent attacks hit the cryptocurrencies Verge, Monacoin and Bitcoin Gold. [42] In the case of Verge, Monacoin, and Bitcoin Gold, it’s uncertain whether they were executed by the same attacker since each attack leveraged a different approach. [42] In the kind of attack that affected Verge, Monacoin and Bitcoin Gold, one malicious actor controls the majority of the network’s total computing power, hence the name “51 percent attack.” [42]

In the BitcoinTalk forum thread titled “Network Attack on XVG / Verge” ocminer says “Yup attack again. as already said, simply reducing drift time doesn’t fix it.” [18] At the time of the attack the Zen network hash rate was 58MSol/s. [21] These can continue until the developers push an update to fix the attack, or the price of the coin has dropped so low that it’s no longer profitable to attack the network. [20] Moving forward, new coins and networks will need to be aware and work on protecting themselves against attacks like this. [21] While it is unclear whether or not the perpetrators of the attack are the same as the last, what is clear is that currently 35 million XVG coins have been minted on the Scrypt and lyra2re algorithms ahead of schedule, causing mining difficulty to plummet and the currencies price to decline steeply. [19] At the peak of the second attack, the hackers were mining 25 blocks per minute, or roughly 8250 XVG or $950 a minute being stolen by thieves. [18] Note that the attack cost does not include the block rewards that the miner will receive for mining. [24] If all of that BTG is associated with the double spending, then the attacker stole around $18.6 million USD. During the attack, the hacker was able to reverse transactions as far back as 22 blocks, which has led to some calls for increasing the confirmation requirements to 50 blocks. [17] To prevent similar double spend attacks in the future, a Bitcoin Gold developer suggested increasing the number of blocks required to confirm transactions from 22 blocks to 50 blocks. [42] By far the largest attack was on Bitcoin Gold, which had about $18.6 million stolen from cryptocurrency exchanges in double spend attacks. [42]

Attacking Bitcoin would require a billion dollars of equipment and several million dollars-worth of electrical power per day, and any such attack so diminish the stolen bitcoins’ sale price, that such an attack would be unattractive. [16] Verge downplayed the attack as nothing more than a DDoS attack, but according to reports, over 35 million in XVG tokens, amounting to over $1.7 million dollars, was stolen as a result of the attack. [18] The Monacoin attack only resulted in a loss of $90,000 and the Verge attack resulted in about $1.7 million worth of the currency being stolen. [42] The attack was the third in the last few weeks on major cryptocurrencies, the others being Verge and Monacoin. [21] Most bigger cryptocurrencies have sufficient mining capacity behind them, making it extremely expensive to acquire the necessary hardware to pull an attack like this off. [24] It is possible that the attacker has a private mining operation large enough to conduct the attack and/or supplement with rental hash power. [21] As Sirer pointed out, it is also possible to rent large amounts of GPU computing power, which makes 51 percent attacks on those networks more feasible. [42] According to a statement by ZenCash, the company, “immediately executed mitigation procedures to significantly increase the difficulty of future attacks on the network,” and contacted exchanges (of which there are over a hundred) to request they impose a requirement of 100 confirmations on any ZenCash transactions, a tactic designed to slow the sale of stolen ZenCash. [16] Based on the website crypto51 the attack on ZEN could be as little as $30,000 to attack the zencash network. [21]

Buying coins drives up the price, making it very expensive to acquire half it also makes it difficult to estimate the cost of an attack. [23] The most recent attack was announced yet again by ‘ocminer,’ by leveraging a similar attack vector as the previous the malicious party was able to repeat the timewarp attack across two of the coins mining algorithms. [19]

As the price of cryptocurrencies continues to increase, so do the rewards of attacks, and thus attackers will continuously be looking for new exploitations. [17] “Since nothing really was done about the previous attacks (only a band-aid), the attackers now simply use two algos to fork the chain for their own use and are gaining millions.” [19] This prevents a particular amount being sent to different addresses and disincentivizes potential attackers because they will be unable to use this feature to commit double spend attacks. [17]

RANKED SELECTED SOURCES(44 source documents arranged by frequency of occurrence in the above report)

1. (18) Cryptocurrency Miners Are Sabotaging Blockchains for Their Personal Gain – Motherboard

2. (17) Timeline of 51% Attacks in May/June 2018 | Anything Crypto

3. (16) Website Outlines The Cost of 51% Attack on Altcoins: Its Lower Than You Think

4. (16) Verge, Bitcoin Gold, whats next? The 51% attacks are just beginning – Crypto Insider

5. (13) Zencash is Hit with a 51% Attack – Whale Reports

6. (12) New Website Highlights Cryptocurrencies at Risk of 51 Percent Attack

7. (12) Blockchains Once-Feared 51% Attack Is Now Becoming Regular – CoinDesk

8. (11) Verge (XVG) susceptible to another 51% attack? Here is what you need to know – Global Coin Report

9. (11) What is a 51% Attack? | Finance Magnates

10. (11) Look At Crypto51.App Proof of Work (PoW) 51% Attack Mining Cost Charts

11. (11) Here’s how much it costs to launch a 51% attack on PoW cryptocurrencies

12. (10) Mining Pools And Hard Forks Foreshadow 51% Attacks | Crypto Briefing

13. (10) Privacy Crypto ZenCash Hacked in 51% Attack | Crowdfund Insider

14. (9) Bitcoin Gold and Verge Suffer 51% Attacks, Highlighting Need for Extra Security Measures – Dash Force News

15. (9) Bitcoin Gold 51% Attacked, $18 Million Stolen Through Double Spends

16. (9) Verge and Bitcoin Gold Are Both Targets of a 51% Attack | [blokt] – Blockchain, Bitcoin & Cryptocurrency News

17. (9) Bitcoin 51% Attack: How It Works, How Much Bitcoin 51 Attack Costs | ?rypto?omes

18. (9) How Much Does a 51% Attack Cost? – Crypto Disrupt

19. (8) Bitcoin Gold Hit By 51 Percent And Double-Spend Attacks, Millions Stolen – ETHNews.com

20. (7) Verge Blockchain Suffers 51% Attack for Third Time

21. (7) Verge Victim to Yet Another 51% Attack, XVG Down 15% In Past 24 Hours | CryptoSlate

22. (7) 51% Percent Attacks: Hacking a $2 Billion Dollar Cryptocurrency for Less Than $1.5 Million – Bitcoinist.com

23. (7) You Can Now 51% Attack a Coin for as Little as $500 – Bitcoin News

24. (6) 51% Attacks: All Small Coins Are Potential Victims? – Cryptovest

25. (6) Bitcoin Gold Hack Shows 51% Attack Is Real | Investopedia

26. (6) 51% Attacks for Under $1000: New Site Shows Alarmingly Low Attack Costs – Ethereum World News

27. (6) Blockchain’s Once-Feared 51% Attack Is Now Becoming Regular – Slashdot

28. (6) What is the 51% attack? – NovaMining – Medium

29. (5) Bitcoin Gold Suffers Rare ‘51% Attack’ | Fortune

30. (5) 51% Attack on Bitcoin Gold Shows Risk is Real By Investing.com

31. (5) What is a 51% attack? Insight into the hacking process

32. (5) What is a 51% Attack? – The Bitcoin News

33. (4) About | Crypto51

34. (4) 51% Attack and Verge Hack Explained : vergecurrency

35. (4) Verge Falls Victim to 51% Attack, Again | CoinCentral

36. (3) Bitcoin Gold hit with 51% attack, up to $18 million gone

37. (3) Bitcoin Gold’s 51% attack is every cryptocurrency’s nightmare scenario — Quartz

38. (2) Ethereum Classic 51% Attack Would Cost Just $55 Mln, Result in $1 Bln Profit: Research

39. (2) ZenCash [ZEN] under 51% attack: A victim of blockchain hackers

40. (2) mining pools – Why has BCH not received a 51% attack yet? – Bitcoin Stack Exchange

41. (2) Anatomy of a Double-Spend / 51% attack – Announcements and Site Feedback – The Bitcoin Gold Community Forum

42. (2) Verge suffers a new 51% attack Crypto Currency News

43. (1) Monacoin Network Still Suffers From a 51% Attack Used for Selfless Mining

44. (1) Ethereum Classic 51% Attack Would Cost Just $55 Mln, and the Profit Would be $1 Bln – Toshi Times