Recapping the May 2018 51% Attacks on Bitcoin Gold
The decentralized, democratic process by which blockchain verifies transactions is normally considered to be one of the most powerful security features boasted by this technology. Unfortunately, as 51% attacks occasionally demonstrate, this isn’t always the case.
By leveraging a large enough sum of money, it is possible to temporarily gain a majority of the hashpower of any coin, thus centralizing the verification process and enabling fraudulent transactions such as double spending. This is precisely what occurred in mid May, when BTG was overpowered by one of the largest 51% attacks in crypto history.
How Serious Are 51% Attacks?
It is important to point out that 51% attacks are not fundamentally an existential threat to any coin. Though they are certainly unfortunate, they are only able to affect present transactions. In other words it is possible for 51% attackers to double spend, block transactions, and otherwise interfere with the normal functioning of a cryptocurrency. But it is not possible for a 51% attacker to, say, alter past transactions on the blockchain and redistribute massive quantities of the coin to themselves.
How Will this Attack Effect BTG?
As Bitcoin Gold explained in their blog, the users most at risk from this attack are Exchanges that buy and sell BTG in large quantities. This is because the tremendous cost of performing a 51% attack means that smaller transactions will not be financially beneficial to the attackers. However, as the Bitcoin Gold foundation also went on to explain, such attacks should really be considered a front to the entire BTG community. The 51% attack prevented honest miners from being rewarded for their efforts, for example. And it also damages the value of BTG itself by harming confidence in the coin.
51% Attacks and the Crypto Market
BTG has lost nearly 20% of its value since the May 19 attack, however, the long term ramifications have yet to be seen. If ongoing 51% attacks occur against a number of major coins, it could even have a similar effect on all cryptocurrencies across the board. However, from a sheerly practical perspective, pulling off a 51% on a currency any larger than Bitcoin Gold would prove incredibly challenging.
Staying Up to Date on The Attacks
Another admission of the BTG team in the wake of the attacks is that it is as of yet impossible to tell if the attacks were truly successful, and that continued attacks are not out of the question. BItcoin Gold has made an effort to be transparent in the wake of these attacks, so paying close attention to the BTG blog in coming weeks is advisable. We will also continue to monitor the situation here, so stay tuned.
Originally published on crypteva.io
