Bitcoin Cash SV Supporter CoinGeek Hit With DDoS Attack Ahead of Hard Fork

CoinGeek, a cryptocurrency news website owned by Calvin Ayre, a gambling tycoon, has recently been hit with a distributed denial of service (DDoS) attack, shortly before the scheduled Bitcoin Cash (BCH) hard fork that threatens to split the chain.

The attack had been going on since Tuesday, and was only fended off yesterday. Commenting on social media Ayre claimed the attackers were “childish and incompetent” as they were unable to take CoinGeek down for a long period of time.

Per his words, Bitcoin – presumably BCH – needs “adults,” which means miners need to be in charge of the network. While it’s currently unclear who attacked the website, Ayre touted it only helped it become stronger.

Notably, CoinGeek is a Bitcoin Cash SV-supporting organization that runs the largest mining pool on the BCH network, that currently has 37.5% of the network’s hashrate. Together with SVPool, supported by self-proclaimed Satoshi Nakamoto Craig Wright, BMG and Mempool, they have over 50% of the network’s hashpower.

While not directly, Ayre has implicitly backed Craig Wright’s threats of a 51% attack against the opposing Bitcoin Cash implementation, backed by the Bitcoin ABC development team. The 51% attack would see Bitcoin Cash SV “choke” the ABC chain by mining empty blocks on it, effectively stopping transactions from going through.

Bitocin Cash network's hashrate in the last 24 hours

Currently it seems only CoinGeek’s website was hit with the DDoS attack, which wouldn’t pose a threat to BCHSV’s operations. If its mining pool or BCHSV’s nodes were hit, however, things could’ve taken a turn to the worst as all of its hashpower could be knocked offline.

In fact, something similar happened in 2014. A mining pool called Ghash had managed to acquire 51% of the Bitcoin network’s hashrate, and was then hit with a DDoS attack that knocked it offline, and saw it slowly go bankrupt.

Coin.Dance data reveals only 8% of the network’s nodes support BCHSV, potentially making them a target. All of this means that while BCHSV’s side has been threatening a 51% attack, it could stop there as the other side appears to be threatening to fight back.

If BCHSV’s miners do attempt to “choke” the BCHABC blockchain after the split, there are various possibilities other than a DDoS attack. Some have speculated the ABC development team could change its proof-of-work algorithm to make their miners incompatible with the network, or it could simply wait out the attack, as mining empty blocks for long would drain their resources.

Notably, some speculate Bitmain – a BCHABC supporter – may pull resources from its Antpool mining pool to help fight the “hash wars” and survive an attack. Some miners, on the other hand, are still undecided, while BTC.top has revealed it will support the side with the most hashrate.

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Trans-Fee Mining Crypto Exchange 'FCoin' Insolvent After Mistakenly Being Too Generous

One of the first cryptocurrency exchanges to adopt the controversial trans-fee mining (TFM) model, which has been called a “disguised ICO” has paused trading and withdrawals over a shortage of crypto worth up to $130 million.

According to a statement published by FCoin’s founder Zhang Jian, a former Huobi CTO, the exchange is now unable to process withdrawals as its reserves are down by between 7,000 to 13,000 bitcoin, worth over $130 million at press time, over an issue that’s “a little too complicated to be explained in a single sentence.”

Zhang’s statement details the cryptocurrency exchange wasn’t hacked, nor is it pulling an exit scam on its users. He detailed that an internal system error gave users more mining rewards than they should have received, noting the error wasn’t detected for a long period of time.

The transaction-fee mining model, which saw FCoin’s trading volume surpass $5 billion per 24 hours numerous times, sees the cryptocurrency exchange incentivize trading via its own token, FT. FCoin reimbursed users for transaction fees paid in BTC or ETH with FTs until 51% of the coin’s supply was distributed, and redistributed 80% of the BTC and ETH it collected to those holding FT tokens.

The controversial model drew criticism and saw Zhang defend it, claiming it was a misunderstood invention. At the time, he said:

If you look back at history, all new things were not recognized at the beginning. Many were believed to be fraud. Jack Ma was recognized as a fraud when he first promoted the internet in China.

Various cryptocurrency exchanges started adopting the TFM model shortly after, with research showing these platforms had unusually thin order books and low traffic taking into account the trading volumes they had.

According to Zhang, the errors in FCoin’s system gave away too many tokens in mining rewards from mid-2018 to mid-2019, when a complete back-end auditing system was implemented. As throughout 2019 the price of FT kept on dropping, Zhang and his team reportedly used their own funds to buy back tokens and drive up demand, a decision he claims was an error.

This, as it gave users a chance to sell their FT tokens and withdraw as much as possible from their accounts, while FCoin bought up tokens that kept on losing value. Zhang’s announcement came shortly after FCoin suspended its platform over a risk-control issue.

Zhang is now reportedly manually processing users’ withdrawal requests sent via email. The founder of the exchange claimed he will “switch tracks” to start again, and noted he hopes he can use the profits made from new ventures to “compensate everyone for their losses.”

Featured image via Unsplash.