After attacks on Verge and Bitcoin Gold, the vulnerability of many altcoins to 51 percent attacks has been highlighted again by an anonymous Tweeter who has revealed plans to live stream attacks of low hashrate coins
In a worrying trend over the last few months, several altcoins have suffered from fifty one percent attacks, including top 50 cryptocurrencies like Verge and Bitcoin Gold.
This trend was predicted last year by computer science researcher Joseph Bonneau, who released a study showing that as time went on, it would become more economical to execute these attacks by renting hashpower from cloud mining outfits, rather than buying all the equipment needed — which could be extremely expensive.
Just a few months after the research was released, a spate of prominent attacks began. The most publicised breach was that of Bitcoin Gold — a coin designed to liberate bitcoin from centralised control by allowing mining with common GPUs. This design feature backfired on the coin, as it meant a relatively small amount of rented hashpower was needed for attackers to overpower the network, and falsify the ledger to eventually make off with around $18 million from several exchanges.
Public 51 percent attacks — barbaric spectacle or educational necessity?
"Geocold" is the anonymous Twitter handle that has announced crypto’s latest sideshow — a public takedown of altcoins using 51 percent attacks.
According to the accompanying Reddit post, written under the name "team-periwinkle", Einsteinium is to be the first crypto to face public assault in Geocold’s crusade — which the security vigilante claims is not borne from malice, but from the desire to educate and show the community just how easily these attacks can be carried out:
"Hey, 51% attacks are easy, if you’re a small cap coin you should be spooked"
To illustrate this, the attacker says they will live stream the attacks — giving the crypto community an opportunity to witness the takedown in real-time. However, they have been unable to secure a livestream facility after being banned from Twitch, and the attacker now says they will simply record their attacks and upload them to YouTube.
How dangerous is this game?
The relative ease with which a 51 percent attack can be carried out, has led it to haunt the plans of many Proof-of-Work cryptocurrencies. If successful, such attacks enable the rewriting of blocks — letting attackers leap right over the double spend limit by falsifying transaction history.
All that’s needed for this to happen, is for the majority of the miners of a particular cryptocurrency to turn malevolent. But even if they hold the majority of computing power (at least 51 percent) they still have little to gain by attacking the network, and a great deal to lose.
Not only is the likelihood of success slim, but double spend transactions would still only be possible under certain conditions, and any loot obtained would rapidly reduce in value as confidence in the coin was lost.
Nevertheless, these attacks have been on the rise — a trend which has likely prompted the creation of Geocold’s plan.
The 51 percent hit list
Since the attacks on Bitcoin Gold and Verge, several websites have sprung up detailing the specific requirements needed for would-be 51% attackers to take control of different altcoin networks.
Crypto51 is one of these, and estimates the cost of such an attack by renting the requisite hash power from NiceHash — a cloud mining centre where you can buy or sell computing power on demand.
The site developer, writing on Reddit under the pseudonym xur17, spoke about his motivation for creating the site:
"After the Bitcoin Gold 51% attack a few weeks ago, I was curious what an attack like this costs against other currencies. I calculated the cost of renting hashing power from NiceHash to complete an attack. I found it surprising that it is possible to rent enough hashing power for many of the smaller currencies, which makes me question the use of PoW for smaller coins."
With few miners and little computing power needed to control the network, Einsteinium sits at the top of Crypto51’s list. The coin’s low hash rate (12,862% nice-hashable rate) makes it an easy and cheap target — costing only an estimated $25 USD per hour to attack.
Coins like Bitcoin and Ethereum, however, with one percent and five percent nice-hashable rates respectively, are far less susceptible to such attacks. Crypto51 estimates that an hourly assault on Bitcoin would come to just over half a million USD.
That such an active interest is being taken in the ongoing security of altcoins is encouraging, and although hodlers of the coins might not see it that way, the experiment serves a valuable purpose.