New reports reveal that Bitcoin Gold (BTG) blockchain network suffered the infamous 51% attack that resulted in the double spending of 7,167 tokens worth about $72, 000.

According to James Lovejoy, the President of MIT Bitcoin Club, who published the analysis on Github, BTG suffered two deep reorganizations, which caused the double-spending. Lovejoy also revealed that both blocks were compromised by a mining activity originating from the same address.

This news marks the second time that Bitcoin Gold, a 2017 bitcoin hard fork, has fell victim to these attacks after the last attack in 2018, which cost the network around $18 million and later delisting from several exchanges.

Stolen Funds Were Transferred To Binance

In his analysis, Lovejoy stated that his team noted at the time of the attack, one account on Binance received BTC deposits for trading after six confirmations which were then available for withdrawal after six more confirmations:

“A fourteen or fifteen block reorg would this evade both Binance’s escrow periods. Binance has since increased their withdrawal requirement for BTG to twenty confirmation.”

BTG’s Low Hash Rate is Its Biggest Flaw, Lovejoy Suggests

BTG was founded by Jack Liao to be a more decentralized currency than Bitcoin. It uses the Proof of Work (PoW) consensus algorithm, just like bitcoin. The difference is that BTG uses the Equilash hash algorithm while BTC uses the SHA 256, which only allows mining with ASIC gear. Market cap ranks BTG in the 20th position despite the fact its prices depend on the interests of buyers.

Lovejoy estimated that regenerating each reorg cost the miner about $ 1,700 and calculated that the miner could have recovered approximately the same value from the block rewards:

“It is possible that the attackers were profitable if the double-spends succeeded at defrauding the attacker’s counterparty or break even if the double=spends were unsuccessful. This suggests that a confirmation required on the order of tens of blocks for BTG is still far too few to make the budget constraint to launch a significant attack.”

51 Percent Attacks Exploit Many Blockchain Networks

Double spending, a threatening flaw in the design of a blockchain network, occurs when the same coin is spent more than once on the network. Many networks have, at one point, suffered double-spending, which causes inflation by creating coins in the network that did not exist before.

A report by BitMEX shows that another Bitcoin hard fork, Bitcoin Cash, lost over $1.3 Million last year in a double-spending attack after a software update.

Some networks are better at detecting these attacks and shutting them down before any damage is done. Networks like VergeCurrency, have reported cases of failed attempts.

