Ethereum Classic Price Barely Moves Despite 51% Attack

When the 18th-largest cryptocurrency falls prey to a 51% attack, you’d expect it to make an impact on the coin’s short-term price movements. However, following a brief drop on Monday, the Ethereum Classic price is only performing moderately worse than its peers.

CCN reported on Monday that Ethereum Classic’s team had used Twitter to warn exchanges of suspected network problems. They asked exchanges to wait up to 400 confirmations for deposits and withdrawals of ETC. This measure is intended to ensure that fraud is either minimized or impossible, depending on the actual situation.

Coinbase Suspends All Ethereum Classic Activity

What was noticed by Ethereum Classic and CCN was later confirmed by Coinbase, which froze all deposits, withdrawals, and trading of ETC on its platform after determining that the issue was a 51% attack.

Binance continued all of the above, as did several exchanges. The leading exchange for trading ETC today was EXX. It had 22% over the overall volume, evenly split between USDT and BTC markets.

The leading exchange for trading ETC today was EXX.

Later in the day, Ethereum Classic developers posted a probable theory about the network issues to Twitter.

Ethereum Classic (ETC) Drops 10% But Recovers

On the whole, Ethereum Classic was trading about 10% lower over the course of the day, breaching the $5 marker with hard pressure on the sell side.

At the time, Binance markets on ETC were chaotic and active. There were orders for over 4000 ETC at the price of .001211 BTC. Sellers had congregated around .001233, with over 4,200 ETC there. Both prices are a reduction from yesterday’s high of more than .00134. The BTC value is more important in ETC markets as the majority of its markets are denominated in BTC rather than USD.

There were orders for over 4000 ETC at the price of .001211 BTC. Sellers had congregated around .001233, with over 4,200 ETC there. Both prices are a reduction from yesterday’s high of more than .00134.

However, ETC began to recover on Tuesday, and by the time of publication the coin was down just 4% against Bitcoin and 3.51% against USD.

Future For Ethereum Classic?

While Ethereum Classic retains the original functionality of Ethereum, it has yet to pick up any real demand as regards its so-called “global computer” or smart contract platform. While the majority of dApp projects launched over the past couple of years have launched on Ethereum or at least done their ICO there, few have used Ethereum Classic. Ethereum Classic, importantly, has all the capabilities of Ethereum.

The release of new mining hardware will only affect Ethereum and Ethereum Classic for awhile longer. Ethereum Classic developers have reportedly been working on a solution for the proof-of-stake conundrum.

Network turbulence is always good for bears. Markets like BCH and ETC certainly have their share of bears.

The cryptocurrency market as a whole is very nascent. The usability and usefulness of decentralized applications is very far from reaching its full potential. Developers entering the space today have a wide variety of platforms to choose from. While the network demonstrated some oddities today, it was still usable.

The question for Ethereum Classic traders is: how will this affect the value of ETC going forward? Moreover, was this a one-time thing, or will similar disruptions happen in the near future as more new mining hardware comes online?

Time will tell.

Disclosure: the author trades and owns Ethereum Classic.

Author: P. H. Madore
Image Credit

This College Freshman Is Out to 51% Attack Your Cryptocurrency

A college freshman is coming after your cryptocurrency – but not to steal your coins, just to prove that someone could do so pretty easily.

According to a crypto enthusiast and security researcher going by the handle “geocold51,” most small-scale cryptocurrencies are at risk from the industry’s most feared vulnerability – the 51% attack. During this attack, a miner takes over more than half of a cryptocurrency’s mining power, which then allows them to erase a past transaction and replace it with another transaction – called a double spend.

While the ecosystem that’s been built up around bitcoin and other top-tier cryptos make them resistant to these kinds of attacks, other cryptocurrencies with less of a community of miners aren’t as secure.

Sure enough, on smaller coins, these kinds of attacks are getting more common. In a new report, Group-1B found $20 million worth of crypto theft accomplished with such attacks in 2018, as TNW reported.

On Saturday, October 13, geocold51 decided to display just how easy it was – livestreaming his attempt to 51% attack Bitcoin Private, a crypto with close to a $47 million market cap (at the time of writing).

Speaking to CoinDesk, geocold51 said, if a cryptocurrency can be so easily attacked, “it’s sort of a misvalue of a given currency by different investors.”

Geocold51 estimates he spent $100 to get to the point where he could have done a demonstration double spend on bitcoin private, but he stopped because his livestream got pulled.

Just to be clear, geocold51 wasn’t interested in stealing, and so he set up the demonstration where he’d send the bitcoin private he owned to two different wallets he owned. In that way, no user or exchange provider gets ripped off.

For him, it’s about displaying that many coins are vulnerable and, therefore, perhaps vastly over-valued.

That said, he estimates that to make a profit off a 51% attack, it would cost a malicious attacker roughly double – so around $200 – to buy some bitcoin on an exchange with his bitcoin private and then make another transaction on the longer chain that invalidates the first transaction, giving him his bitcoin private coins back and leaving the exchange coming up short.

While going through the exchange process costs more, the 51% attack has still become quite economical due to the rise of cloud computing. According to geocold51, without access to cloud mining, an attack like he did on bitcoin private would have cost him about $100,000 in hardware.

“Nicehash and the ability to rent hashing power fundamentally changes the landscape of 51% attacks,” geocold51 told CoinDesk, adding:

“If there’s not a lot of hashing power to secure it, but there is a lot of value associated with it, that’s where you can do a 51% attack.”

Because geocold51 announced the livestream on Reddit, the attempted attack got quite a bit of attention – even dogecoin creator Jackson Palmer tweeted about watching.

Still, the livestream didn’t work exactly as planned, and because of that, geocold51 said he would run a complete attack later. He told CoinDesk he will do it without a stream this week and release a recording of his demonstration on YouTube shortly after.

The inspiration

The young security researcher’s handle might remind some of another security guru.

According to geocold51, he was inspired by one of the most legendary hackers of recent years: geohot, who famously jailbroke the original iPhone, which means the restrictions on carriers and apps were removed.

These days, geohot likes to livestream himself searching for vulnerabilities.

And geocold51 figured he could start doing the same within the cryptocurrency ecosystem.

Geocold51 has a good knowledge of crypto. Back when GPU hardware was still lucrative for hobbyist miners, geocold51 mined quite a bit of bitcoin. He then began trading money on Cryptsy, before the exchange’s CEO allegedly walked away with millions of dollars in its user’s money.

In that, he lost nearly all his bitcoin.

But he still remained interested in the space, and continued to study up on how it all worked. And as the industry divided into hundreds and thousands of different cryptocurrencies, geocold51 thought he might be able to shine some light on the security pitfalls.

And others were interested in that too. His Reddit post about the challenge garnered 1500 upvotes and over Twitch, he received $888 in donations.

The day of the attack

What’s also interesting is that bitcoin private wasn’t his first target.

Instead, geocold51 had intended to go after einsteinium, a volunteer-run litecoin fork with a $19 million market cap and $598,000 in trading volume per day, at the time of this writing.

He announced his intent publicly, and as he got ready for the attack, commenters within his Twitch feed noted that the cryptocurrency’s hash rate was spiking.

Because he had announced the attack in advance, the einsteinium community boosted the hash rate because it was worried that such an attack could cause a chain split and create a second blockchain that people could get stuck on, according to Ben Kurland, one of the project’s board members. At that time, einsteinium was in the middle of a wallet upgrade. If users or exchanges did not upgrade their wallets in time, the blockchain split could have caused property loss.

Seeing the increased hash power, geocold51 decided to attack bitcoin private instead.

According to geocold51, he got up to 60,000 views during the Twitch livestream, before Twitch shut the stream down. The team at Twitch, he said, temporarily suspended him under the “attempts of threats of harm” section of its community guidelines.

He got another livestream up on Stream.Me a half-hour later.

Once broadcasting there, he was able to hire miners through Nicehash to mine bitcoin private. In fact, he almost immediately mined a block. And in very little time, he was controlling more than 50 percent of the hash power on the blockchain.

Pretty soon an account called “CommunityWatch” popped up in the stream and wrote: “Just a quick question: I’m assuming everything we are doing here is legal?”

Minutes later, geocold51’s video feed on Stream.Me cut out.

Geocold51 told CoinDesk that he had already gotten about two-thirds of the hash rate on bitcoin private. He’d transmitted his first transaction to a second wallet he controlled. And he had written another transaction onto an offline chain that went to a third wallet he controlled.

He was about to send this longer chain to the network, but since the whole point was to show people the attack could be done easily, he stopped once the livestreams shut off.

Protected in another way

Still, geocold51 is determined to follow through with his mission, and so will record his next attack to share on YouTube soon.

And while this vulnerability is likely to be worrying to many in the community, geocold51 noted that there is another way these coins are protected based on cryptocurrency game theory.

If someone tried to sell any significant volume of the coins, their price would likely plummet, since the community isn’t robust enough and doesn’t have huge amounts of liquidity. As such, geocold51 argued, even if it is easy to buy hash power and take over a network, it might not be feasible to make a lot of money from an attack.

Nevertheless, geocold51 is committed to continuing, using the donations he received to maybe even try to 51% attack more cryptocurrencies as well.

In fact, he told CoinDesk, he may intentionally attack some cryptocurrencies that have set up preventative measures for 51% attacks, to test them in production. For instance, the team developing Horizen (formerly zencash) believes it’s found a way to disincentivize 51% attacks by introducing certain miner penalties.

Geocold51 said he would be happy to fail against some of these measures.

Running the demonstrations privately and adding some production value on the final recording will likely make for more edifying content, according to geocold51, but he’s still a bit disappointed that his original plan didn’t pan out.

To CoinDesk, he concluded:

“There is something kind of neat about it being live.”

Twitch, Stream.Me and bitcoin private’s teams did not reply to a request for comment for this story.

Author: Brady Dale
Image Credit 

Verge Suffers 51% Attack Yet Again!! (Third Time)

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.

Join in the fun and play on the world’s First Hybrid on-line Casino with BTC and Fiat currency payments. Check on-line for latest promotions.

It started back in April, when Verge suffered a small 51% attack that resulted in 250,000 XVG being stolen by hackers. 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.

51% attacks happen when hackers use a malicious code to mine multiple blocks per minute on a blockchain, allowing the attackers to gain majority control over network hashrates and move XVG to their wallets. 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.

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.

Today, the prominent BitcoinTalk ocminer user who discovered the last two attacks, is reporting that Verge has yet again suffered a 51% attack. 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..”

Verge’s blockchain isn’t the only location hackers have targeted. Verge’s twitter account was also compromised this past March in an unrelated attack.

On a more positive note, Verge made news for becoming the first ever cryptocurrency to be accepted by adult entertainment website Pornhub for their premium subscription services. As one Redditor so cheekily said “Maybe they should take a note from Pornhub and learn to plug up the holes on their blockchain.”

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Tony Spilotro
Image Credit

Bitcoin Gold hacked for 18 million USD

Joker banner.gifIt appears Bitcoin Gold (BTG) has been double spend attacked over and over again, totalling something in the neighbourhood of $18 million at current prices. BTG forums seem to have been tracking the hack, going as far back as last week, monitoring the controversial coin’s hashrate, ultimately determining a 51% attack was under way.


Bitcoin Gold Gets $18 Million Haircut

“An unknown party with access to very large amounts of hashpower is trying to use ‘51% attacks,’” Bitcoin Gold forum poster Mental Nomad announced a week ago, “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 founding economic principle of bitcoin was its alleviation of the double spend problem. It was a main stumbling block in the historical race to create a viable cryptographic monetary form – foiling a great many coders along the way. Satoshi Nakamoto solved it through a decentralized, distributed ledger confirmation process (blockchain). Going as far back as its genesis block from early 2009, users can be confident transactions aren’t rebroadcast. Like clockwork, 6 times an hour, blocks are added – copied to nodes within the universal network.

Bitcoin Gold Hacked for $18 Million
The offending wallet, according to the BTG team.

One way to achieve double spending is known as a 51% attack. It’s accomplished by bogarting the network’s computing power. With a majority, bad actors can get between the Nakamoto solution and transaction confirmations. By stymieing block completion in the usual manner, all sorts of mischief can arise: blockchain mining rewards redirected, users’ transactions reversed, etc. Not too long after, a double spending attack can commence, acting as the fiat equivalent to counterfeiting. Needless to type, any crypto suffering from such a problem is certain to immediately lose user confidence.

Such attacks are interesting for another reason, as Mental Nomad is careful to point out. “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,” he assured last week. “It appears that actions on the part of the exchanges have deterred the attacker, for now.” And hitting exchanges tends to elicit little sympathy, at least initially, due to users being insulated. Exchanges are particularly vulnerable because they generally covet large deposits, which only compounds the problem in cases like these.

Bitcoin Gold Hacked for $18 Million


Over period of days, batches of BTG were deposited into exchanges supporting the forked coin, only to be sent back to the depositor’s wallet. The lag between such a transaction and some exchanges’ discovery is sufficient enough to nab tokens, doubling the filthy lucre. Exchanges trading bitcoin gold have responded by upping transaction confirmation filters, but evidently to no avail as the attacker gains ever-more BTG network control.

Bitcoin Gold team members seem to have communicated with some exchanges. “Requiring more confirmations greatly increases safety,” the forum details. “Until now, some Exchanges were operating with less than five confirmations required. We have been urging higher limits to prevent such an attack, and urging manual review of large deposits of BTG before clearing the funds for trading.” Indeed, according to BTG, “One of the targeted Exchanges reported that they strongly believe this attacker attempted to hit them with a double-spend of BTC in the past. In their words, ‘we are 100% sure that it is the same person, we found many associations between the accounts.’”

Bitcoin Gold Hacked for $18 Million
The traditional way BTC has been able to thwart double spend attacks.

Evidence put forward by the BTG team points to address GTNjvCGssb2rbLnDV1xxsHmunQdvXnY2Ft as the attacker’s wallet; mined coins, according to the forum post reside at GXXjRkdquAkyHeJ6ReW3v4FY3QbgPfugTx. More than 388,201.92404001 BTG were funnelled through the wallet, totalling more than $18 million according to Bitcoin Gold Explorer. That a top thirty crypto by market cap can be so easily troubled is a giant of enough problem, but it could also take exchanges down in the process – something the ecosystem is very sensitive to since Mt. Gox. And though, for now, BTG is confident enough to suggest users are not at risk, history shows that can quickly be the case as an exchange freezes withdrawals in an effort to stop hemorrhaging.

Bitcoin Gold has been beset by controversies since its birth fork late last year, including a recent dust-up between BCH advocate Craig Wright and BTG founder Jack Liao. To be fair, however, it is not the only blockchain to suffer a 51% attack. Mere days ago, recently Chinese government highly rated coin verge (XVG) was made to heel, again. These pages reported XVG, “On the morning of May 22, Suprvona, one of the largest altcoin mining pools, informed its 19,000 Twitter followers that verge was suffering yet another 51% attack, causing all blocks to be rejected.”

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Article credit

Image credit