Bitcoin gold, a relatively minor cryptocurrency that split off from the original bitcoin blockchain in late 2017, has suffered a so-called 51% attack resulting in over $72,000 worth of bitcoin gold tokens being double spent.
A 51% attack can occur when malicious cryptocurrency miners take control of tokens’ blockchain and is the second time it’s now happened to bitcoin gold which saw $18 million worth of bitcoin gold stolen in May 2018.
The price of bitcoin gold, which ranks as the 36th most valuable cryptocurrency according to CoinMarketCap data, jumped following reports of the attack, moving counterintuitively considering the seriousness of an attack of this type and suggesting the market for smaller tokens is still far from maturity.
A 51% attack can be carried out on a cryptocurrency blockchain if a single miner controls more than half of the computing power directed at the network.
The miner is then able to decide what version of the blockchain is accepted by the network, allowing it to initiate a transaction and then reorganize the blockchain to spend the same tokens a second time.
“There were two 51% attacks on bitcoin gold’s blockchain last week on January 23rd,” the Bitcoin Gold Organization said via Twitter.
“Advanced risk control systems in exchanges make it likely one or both attacks failed,” the bitcoin gold developers said, adding they “have been working on a novel 51% double-spend resistant decentralized consensus algorithm since last year” and plan to release it in coming months.
The attack was first spotted by James Lovejoy, a researcher at MIT’s Digital Currency Initiative.
It’s thought bitcoin, the most valuable cryptocurrency by a considerable margin, is relatively safe against 51% attacks due to its growing hash rate—a measurement of computing power on a blockchain network.
Earlier this month, the bitcoin network hash rate reached an all-time high at 126 quintillion hashes per second, up from 38 quintillion hashes per second this time last year.
However, shortly after bitcoin gold suffered its 51% attack, the bitcoin blockchain recorded a so-called stale block that resulted in $3 being double spent—before it was corrected by the network.