Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions
A malicious miner successfully executed a double spend attack on the Bitcoin Gold network last week, making BTG at least the third altcoin to succumb to a network attack during that timespan. Bitcoin Gold director of communications Edward Iskra first warned users about the attack on May 18, explaining that a malicious miner was using the exploit to steal funds from cryptocurrency exchanges. To execute the attack, the miner acquired at least 51 percent of the network’s total hashpower, which provided them with temporary control of the blockchain.
Obtaining this much hashpower is incredibly expensive — even on a smaller network like bitcoin gold — but it can be monetized by using it in tandem with a double spend attack. After gaining control of the network, the attacker began depositing BTG at cryptocurrency exchanges while also attempting to send those same coins to a wallet under their control. Ordinarily, the blockchain would resolve this by including only the first transaction in the block, but the attacker was able to reverse transactions since they had majority control of the network.
Consequently, they were able to deposit funds on exchanges and quickly withdraw them again, after which they reversed the initial transaction so that they could send the coins they had originally deposited to another wallet. A bitcoin gold address implicated in the attack has received more than 388,200 BTG since May 16 (mostly from transactions it sent to itself). Assuming all of those transactions were associated with the double spend exploit, the attacker could have stolen as much as $18.6 million worth of funds from exchanges.
At present, bitcoin gold ranks as the 26th-largest cryptocurrency, with a circulating market cap of $827 million.