On July 10, Bitcoin Gold, a cryptocurrency the main goal of which was to prevent 51% attacks, posted an emergency update of their blockchain for all pools, exchanges, wallets, and community running nodes. Version 0.17.2, which was published on July 2 when the attempted attack was first detected, is now available for download on the official site of the cryptocurrency.
The attack appears well-funded, as the perpetrators mined the Equihash-based cryptocurrency for almost two weeks with more than half of its entire hash power. However, unless their main goal was to expose the insufficient network security of the Bitcoin Gold protocol, their effort has failed.
Bitcoin Gold developers were well-prepared with a response to the attack, having “detected this illicit activity early on”. The solution was an emergency hard fork which incorporated “checkpoints” – a measure which while controversial for its centralised approach, has been used even in Bitcoin, and most recently – in Bitcoin Cash, following the BCH/BSV split.
The organization recommends that users update their BTG Core full nodes in order to prevent any potential digital asset losses. In their official announcement, Bitcoin Gold developers explained to users how to step-by-step transition to the new version manually. They also suggested other ways for people to see if they are on the honest chain, one of which is by directly running a written command on the bgold-cli console.
Apart from the instructions, the developer team posted emergency information about the earlier attack and reassured users that the updated code has automatically rejected the foreign chain.
“We detected this illicit activity early on and sent alerts to pools and exchanges to protect them; many closed their wallets over a week ago,” said the developers. They also noted that, in the new version, a specific honest block was checkpointed so the attack could be prevented.
“With this block checkpointed, the attacker’s chain could not take over, but this information was not public, and the attacker continued to mine. The attacker mined their secret chain for nearly 10 days, renting power from NiceHash to do so. Today, on July 10, the attacker released over 1300 blocks.”
Since these blocks were anchored to a block mined on July 1st, all the pools and exchanges running the updated code managed to successfully reject the attacker’s chain. Bitcoin Gold users will now have to update to the new version or at least push their node onto the honest chain by using the command provided.
Given that 51% attacks are not uncommon for the Bitcoin Gold chain, there was little trust in the network to be lost – in fact, Bitcoin Gold saw a respectable surge in price following the events – perhaps thanks to its team’s quick and efficient response. This also rules out the possibility that an attacker could have profited from short selling the asset, which is still a top 60 cryptocurrency with a Binance listing – against all odds.
Following an attack in January, this is the second time this year hackers have tried to manipulate the BTG blockchain through a 51% attack. After managing to steal $18 million worth of crypto in May 2018 (first 51% attack), and $70,000 six months ago, developers have become more alert of intrusions, albeit there is still a major problem with the chain. Release of more information about future updates of the proof-of-work algorithm of Bitcoin Gold is yet to be announced by the organization.