Bitcoin Gold was created last year as a bitcoin fork, meaning a change big enough to generate a new criptomoeda. Its aim is to counter the centralization of power in the hands of a few groups - but BTG has suffered a setback.
Last week, Bitcoin Gold suffered a 51% attack. This means that a group managed to control its blockchain and authorized fraudulent transactions, allowing to spend the same currency twice.
The loss is estimated at about $ 18 million. It works like this: the agent deposits BTG in bureaux de cambio, exchange for another criptomoeda and makes a withdrawal. As it has control of the network, it reverses the initial deposit - and the exchange office loses the Bitcoin Gold it had received.
Edward Iskra, communication director of Bitcoin Gold, says in the official forum that this attack has been going on for at least a week. Exchange houses that accept large deposits have automatically become targets of the coup.
This is the problem of "double spending", which the blockchain had solved under one condition: no one can control 51% of the network. This is somewhat unlikely for bitcoin, which has a huge set of miners - but it's a problem for smaller crypto-coins.
In double spending, the fraudster deposits the currency in a currency exchange office, exchanges that currency for another, and makes the withdrawal. Then he reverses the deposit and leaves the exchange house at a loss. He can deposit the same Bitcoin Gold in different places and profit from it.
A portfolio of BTGs involved in the attack received more than 388,200 units of cryptomoeda since May 16, mainly from transactions sent to itself. Most of these funds have already been transferred to other portfolios.
Recently, a criptomoeda named Verge suffered the attack of 51% twice, leading to a loss of $ 2.7 million. The same happened with Monacoin, causing losses of US $ 90 thousand.
Decentralized networks run the risk of being dominated by a single person or group. We see this in Silicon Valley: In the fifth season of the series, Pied Piper members are faced with the risk of losing control of their "new internet." The reason is a 51% attack.
I lost few dollars on btg..hope the price goes up.
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