Double spending refers to a transaction that uses the same input as another transaction that has already been validated on the network, meaning the user can spend the same digital asset more than once.
GitHub user ‘Metalicjames’ was the first to reveal the attack, identifying two separate attacks from the same address over two days.
On Thursday January 23, the attackers removed 14 blocks from the BTG network, replacing them with 13 blocks and double spending 1,900 BTG, worth around $19,000 at the time.
The next day, the attackers removed 15 blocks from the network and issued another 16 blocks, which resulted in the double spending of 5,267 BTG, which was just over $53,000 at the time.
Attackers mined the double-spent blocks on both days through the same address, pointing to the same attacker or group.
It was likely easier for attackers to gain control of the majority of the hashing power because the protocol is not adequately decentralised.
This occurs when network participation is low – either because a coin has declined in popularity or use – or when a centralised cluster of node operators holds the majority of the hashing power.
This may have made Bitcoin Gold an easy target for attackers.
In the wake of the attack, Binance has increased its withdrawal requirement for BTG to 20 confirmations in an effort to stem the flow of funds.
What is Bitcoin Gold?
To make matters worse, BTG was the target of another 51% attack in May 2018, which saw the loss of 388,000 BTG – worth around $18 million USD at the time. The perpetrator was never identified.
In an exclusive interview with Coin Rivet in November 2019, BTG co-creator Alejandro Regojo shared that the protocol is now looking to expand into emerging markets such as Venezuela and Ghana.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.