The Bitcoin Gold (BTG) development team have announced that on Friday (July 10) they managed to prevent a 51% attack on the BTG blockchain network.
Bitcoin Gold is a hard fork of Bitcoin that was launched on 24 October 2017. It uses a modified version of a Proof-of-Work (PoW) mining algorithm called Equihash that was originally developed for Zcash (ZEC).
Here is how Binance Academy defines a “51% attack”:
“A 51% attack is a potential attack on a blockchain network, where a single entity or organization is able to control the majority of the hash rate, potentially causing a network disruption.
“In such a scenario, the attacker would have enough mining power to intentionally exclude or modify the ordering of transactions. They could also reverse transactions they made while being in control – leading to a double-spending problem.
“A successful majority attack would also allow the attacker to prevent some or all transactions from being confirmed (transaction denial of service) or to prevent some or all other miners from mining, resulting in what is known as mining monopoly.”
According to a “Emergency update 0.17.2” notice posted on the Bitcoin Gold website, although the attacker(s) finally released a very long chain (over 1300 blocks long) that they had had been mining since July 1, the Bitcoin Gold blockchain network was not harmed in any way since the BTG team had “detected this illicit activity early on and sent alerts to pools and exchanges to protect them.”
The reason that the BTG blockchain was not affected by this attack is that all BTG mining pools and centralized crypto exchanges that support BTG had already updated to version 0.17.2 of the BTG software, which is immune to this attack since it includes “a checkpoint at block 640650, hash 000000059ec8884fa4fbbdbe46c09cfb4ecba281dfa2351a05084e817c1200ae from July 2 at 2am UTC, mined by MiningPoolHub, a known honest block.”
Because of this checkpoint, “the attacker’s chain could not take over, but this information was not public, and the attacker continued to mine.” The attacker kept mining their chain in secret for almost 10 days using rented hash power from NiceHash, and released its chain of 1300+ blocks on July 10.
Since “those attacking blocks are anchored at a block mined on July 1st (before the checkpoint)”, the honest pools and exchanges, which were running version 0.17.2 of the BTG software, “automatically rejected the attacker’s chain.”
Now, everyone else needs to update their nodes.
As you can see from the two week BTG-USD price chart from CryptoCompare, on July 1, Bitcoin Gold was trading as high as $10.98 (at 10:00 UTC), and by 22:00 UTC on July 10 (around 15 minutes before the BTG team announced that the attack had been foiled), BTG was trading at $9.089:
However, since the BTG team’s announcement, the BTG price has been rising, and currently (as of 19:10 on July 11), BTG is trading at $9.660, up 4.77% in the past 24-hour period.