Bitcoin Gold Cryptocurrency Under a 51% Attack
All is not well in the Bitcoin Gold environment at the minute, for that cryptocurrency which is simply another fork of the Bitcoin blockchain has come under attack, and the way in which it has been attacked is via a 51% attack.
If you are unaware of what that means, you need to get your head around how the Bitcoin blockchain works, and that is a series of miners contribute their processing power to process all new transactions that are performed by Bicton Gold users.
That works in the same way as Bicton itself works, as you would expect with them being on the same blockchain, albeit Bitcoin Gold being on a fork of the original blockchain.
But, any vulnerabilities on the Bicton blockchain does then leave Bitcoin Gold open to the same vulnerabilities and one of those is that an attacker could, if they have the resources to do so, take control of the blockchain and could then defraud digital currencies exchanges quite easily.
That is something that quite hard to do, however when a group of people all manage to control 51% or more of the blockchains processing power, they are then able to alter and tamper with the transactions performed on the blockchain.
This type of attack is one of many reasons why major banking institutions and governments of the world have be reluctant to venture into the cryptocurrency environment, which many of them are itching to do so!
How a 51% Attack is Organized
It is all the cryptocurrency miners who collectively verify independently all transactions performed on the blockchain, and by harnessing their combined processing power also known as hash power they can then verify and then add all new transactions performed by a cryptocurrency onto its blockchain.
Their reward for doing so is that they are given small units of the cryptocurrency they are verifying and processing, which makes it financially viable for them to do so, the more hash power anybody or any organisation they have the more cash ultimately, they can earn.
But when any cryptocurrency miners have over 51% of the hash power of any blockchain that then puts them in the position whereby they can mess around and tamper with the transactions, one of the main things they can do is to allow coins or tokens to be spent more than once.
That is known as double spending, and is exactly what Bitcoin Gold is currently experiencing, which then puts anybody using that cryptocurrency at serous risk of fraud when they accept them.
Due to the sheer size of Bitcoin however, there is very little chance that any one person or a group of people could gain a 51% or more share of the hash power of that blockchain, but smaller cryptocurrencies such as Bitcoin Gold are at serious risk of such an attack, and that is what they are experiencing right now!
The way in which this is currently being played out is that people who are in on the scam are sending large amounts of bitcoin Gold to digital currency exchanges and then swaps them for other another cryptocurrency and then withdraws them, however they then continue to deposit the same coins at other exchanges and withdraw their ill-gotten gains once again!
As the corrupt miners are tampering with the blockchain the scam only comes to light when it is too late, and as such by the time an exchange notices it is too late, and they can and will have lost a small fortune.
Bitcoin Gold is not the only cryptocurrency to have been the victim of such an attack for Verge have been attacked twice and has both Monacoin and Electroneum.
If you have any worries about Bitcoin then don’t, as that cryptocurrency has one million times more hash power than Bitcoin Gold, which means the sheer processing power needed by miners to take over 51% of the hash power is massive and something no one could feasibly or easily do!