Binance Bitcoin Gold 51% Attack: Difference between revisions
(Nothing) |
(Another 30 minutes complete. Additional sources merged in. Information moved around.) |
||
| Line 1: | Line 1: | ||
{{ | {{Case Study Under Construction}}{{Unattributed Sources}} | ||
{{Unattributed Sources}} | |||
[[File:Binance.jpg|thumb|Binance]]In 2018, a string of Bitcoin Gold 51% attacks targeted multiple platforms including Binance. In response to these attacks, the block confirmation times were increased. | [[File:Binance.jpg|thumb|Binance Homepage]]In 2018, a string of Bitcoin Gold 51% attacks targeted multiple platforms including Binance. In response to these attacks, the block confirmation times were increased. | ||
This exchange or platform is based in Cayman Islands, or the incident targeted people primarily in Cayman Islands.<ref name="cryptoslate-3936" /><ref name="wikipedia-3945" /><ref name="zdnet-3946" /><ref name="bitcoingoldforum-3947" /><ref name="cryptoglobe-3948 | This exchange or platform is based in Cayman Islands, or the incident targeted people primarily in Cayman Islands.<ref name="cryptoslate-3936" /><ref name="wikipedia-3945" /><ref name="zdnet-3946" /><ref name="bitcoingoldforum-3947" /><ref name="cryptoglobe-3948" /> | ||
== About Binance == | == About Binance == | ||
| Line 11: | Line 10: | ||
"Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency." | "Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency." | ||
== About Bitcoin Gold == | |||
"Bitcoin Gold was the second fork of Bitcoin when it went live in November 2017 (amidst a few technical issues that occurred pre-launch). Albeit being marketed as a cryptocurrency supporting decentralized mining through an ASIC-resistant mining algorithm, critics of the cryptocurrency called it a “cash grab.” Yet, most bitcoin holders were given free BCG coins relative to their holdings of Bitcoin, so most welcomed the “free money.”" | "Bitcoin Gold was the second fork of Bitcoin when it went live in November 2017 (amidst a few technical issues that occurred pre-launch). Albeit being marketed as a cryptocurrency supporting decentralized mining through an ASIC-resistant mining algorithm, critics of the cryptocurrency called it a “cash grab.” Yet, most bitcoin holders were given free BCG coins relative to their holdings of Bitcoin, so most welcomed the “free money.”" | ||
== The Reality == | == The Reality == | ||
"In a May 11th blog post, the Bitcoin Gold team made Bitcoin Gold (BTG) holders aware of attempts to attack the Bitcoin Gold network. Exchanges were also asked to guard against the attack since potential attackers were likely to profit by double spending coins in exchange transactions." | |||
According to a blog post by MentalNomad, "some Exchanges were [reportedly] operating with less than five confirmations required"<ref name="bitcoingoldforum-7535" />. | |||
== What Happened == | == What Happened == | ||
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it. | The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it. | ||
"Exchanges including Bittrex, Binance, Bithumb, Bitinka, and Bitfinex lost an estimated $18 million worth of coins due to the double spend attack." | |||
{| class="wikitable" | {| class="wikitable" | ||
|+Key Event Timeline - Binance Bitcoin Gold 51% Attack | |+Key Event Timeline - Binance Bitcoin Gold 51% Attack | ||
| Line 45: | Line 32: | ||
|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. | |Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. | ||
|- | |- | ||
| | |May 16th, 2018 4:37:54 PM MDT | ||
| | |First Attack Reported | ||
| | |The reported time of the first attack on block 528735<ref name="bitcoingoldforum-7535" />. | ||
|- | |||
|May 18th, 2018 6:51:47 AM MDT | |||
|Bitcoin Gold Forum Discussion | |||
|Bitcoin Gold Forum user MentalNomad starts a thread warning about an "unknown party with access to very large amounts of hashpower" who is "trying to use “51% attacks” to perform “double spend” attacks to steal money from Exchanges"<ref name="bitcoingoldforum-7535" />. | |||
|- | |||
|May 18th, 2018 8:17:21 AM MDT | |||
|Attacker Addresses Reported | |||
|The addresses of the double spend attacker are reported on the forum thread<ref name="bitcoingoldforum-7535" />. | |||
|- | |||
|May 18th, 2018 8:33:06 AM MDT | |||
|List Of Reverted Blocks Provided | |||
|The forum thread provides a list of 17 valid forks which have happened on the bitcoin gold blockchain<ref name="bitcoingoldforum-7535" />. | |||
|- | |||
|May 18th, 2018 11:25:40 PM MDT | |||
|Final Attack Reported | |||
|The reported time of the final attack on block 529048<ref name="bitcoingoldforum-7535" />. | |||
|} | |} | ||
== Technical Details == | == Technical Details == | ||
This | A 51% attack consists of a party renting or obtaining enough hashing power that they can exceed the hashing rate of the normal blockchain. This allows them to mine blocks faster than the original chain. They will spend funds on the original chain, and send funds to themselves on their alternate chain. Once the funds on the original chain are accepted and they receive whatever they swapped for on an exchange, they broadcast all of the alternative chain blocks, which the network had to accept because that chain is longer. | ||
=== First Attack On Block 528735 === | |||
May 16, 2018 10:37:54 PM UTC | |||
"Scrutiny of unusual activity on the network has revealed the scheme, in which "double spending" attacks have been launched against cryptocurrency exchanges trading the virtual currency." | |||
"Traders of the coin, established in 2017 through a hard fork of the main Bitcoin (BTC) network, have been tracing the attack since last week." | |||
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it." | |||
# Funds: <code>GTNjvCGssb2rbLnDV1xxsHmunQdvXnY2Ft</code> | |||
# Receive mined coins: <code>GXXjRkdquAkyHeJ6ReW3v4FY3QbgPfugTx</code> | |||
See valid reverts as #15 on <ref name="bitcoingoldforum-7535" />. | |||
== Total Amount Lost == | == Total Amount Lost == | ||
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it." | |||
== Immediate Reactions == | |||
Bitcoin Gold updated their blog to indicate that the 51% attack had occurred on the network. | |||
=== Blog Post Updated === | |||
"The blog post was updated on the 24th of May to announce that a dreaded 51% attack occurred on the network between the 16th and the 19th of May 2018. The attack on Bitcoin Gold also involved rented hashpower from cloud mining services." | |||
=== Delisting From Bittrex === | |||
"Bittrex delisted BTG following the BTG team’s refusal to pay compensation of 12,372 BTG. Bittrex blamed the Bitcoin Gold team for negligence and demanded compensation in order to keep the cryptocurrency listed." | |||
"In response, the Bitcoin Gold team stated that 51% attacks are a known risk in the ecosystem. They added that the BTG organization was not responsible for the attack since it was not caused by flaws in the Bitcoin Gold blockchain or code. Additionally, the team cited warnings it gave prior to the attack as well as the assistance it gave exchanges for defending themselves." | |||
== Ultimate Outcome == | == Ultimate Outcome == | ||
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done? | What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done? | ||
=== Tracing Of Funds === | |||
"Traders of the coin, established in 2017 through a hard fork of the main Bitcoin (BTC) network, have been tracing the attack since last week." | |||
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it." | |||
=== Network Upgrade === | |||
"The BTG team also claimed that the network upgrade carried out in July 2018 will reduce the likelihood of another attack on the network. Bittrex ended up delisting the coin, along with several others. Bitcoin Gold still survived as the 27th most capitalized coins on CoinMarketCap." | |||
== Total Amount Recovered == | == Total Amount Recovered == | ||
| Line 91: | Line 120: | ||
== References == | == References == | ||
<references><ref name="cryptoslate-3936">[https://cryptoslate.com/prolific-51-attacks-crypto-verge-ethereum-classic-bitcoin-gold-feathercoin-vertcoin/ Five most prolific 51% attacks in crypto: Verge, Ethereum Classic, Bitcoin Gold, Feathercoin, Vertcoin | CryptoSlate] (Sep 29, 2021)</ref> | <references> | ||
<ref name="cryptoslate-3936">[https://cryptoslate.com/prolific-51-attacks-crypto-verge-ethereum-classic-bitcoin-gold-feathercoin-vertcoin/ Five most prolific 51% attacks in crypto: Verge, Ethereum Classic, Bitcoin Gold, Feathercoin, Vertcoin | CryptoSlate] (Sep 29, 2021)</ref> | |||
<ref name="wikipedia-3945">[https://en.wikipedia.org/wiki/Binance Binance - Wikipedia] (Nov 9, 2021)</ref> | <ref name="wikipedia-3945">[https://en.wikipedia.org/wiki/Binance Binance - Wikipedia] (Nov 9, 2021)</ref> | ||
<ref name="zdnet-3946">[https://www.zdnet.com/article/bitcoin-gold-hit-with-double-spend-attacks-18-million-lost/ Bitcoin Gold suffers double spend attacks, $17.5 million lost | ZDNet] (Nov 9, 2021)</ref> | <ref name="zdnet-3946">[https://www.zdnet.com/article/bitcoin-gold-hit-with-double-spend-attacks-18-million-lost/ Bitcoin Gold suffers double spend attacks, $17.5 million lost | ZDNet] (Nov 9, 2021)</ref> | ||
<ref name="bitcoingoldforum-3947">[https://forum.bitcoingold.org/t/double-spend-attacks-on-exchanges/1362/24 Double Spend Attacks on Exchanges - #24 by MentalNomad - Announcements and Site Feedback - The BTG Community Forum] (Nov 9, 2021)</ref> | <ref name="bitcoingoldforum-3947">[https://forum.bitcoingold.org/t/double-spend-attacks-on-exchanges/1362/24 Double Spend Attacks on Exchanges - #24 by MentalNomad - Announcements and Site Feedback - The BTG Community Forum] (Nov 9, 2021)</ref> | ||
<ref name="cryptoglobe-3948">[https://www.cryptoglobe.com/latest/2018/05/bitcoin-gold-hit-with-51-and-double-spend-attacks-18-million-stolen/ Bitcoin Gold Hit With 51% and Double Spend Attacks, $18 Million Stolen | Cryptoglobe] (Nov 9, 2021)</ref> | <ref name="cryptoglobe-3948">[https://www.cryptoglobe.com/latest/2018/05/bitcoin-gold-hit-with-51-and-double-spend-attacks-18-million-stolen/ Bitcoin Gold Hit With 51% and Double Spend Attacks, $18 Million Stolen | Cryptoglobe] (Nov 9, 2021)</ref> | ||
<ref name="bitcoingoldforum-7535">[https://web.archive.org/web/20180808073029/https://forum.bitcoingold.org/t/double-spend-attacks-on-exchanges/1362 Double Spend Attacks on Exchanges - Announcements and Site Feedback - The BTG Community Forum Archive August 8th, 2018 1:30:29 AM MDT] (Apr 29, 2022)</ref> | |||
<ref name="bitcoingoldforum-7535">[https://forum.bitcoingold.org/t/double-spend-attacks-on-exchanges/1362 Double Spend Attacks on Exchanges - Announcements and Site Feedback - The BTG Community Forum] (Apr 29, 2022)</ref></references> | </references> | ||
Latest revision as of 12:36, 30 November 2023
Notice: This page is a new case study and some aspects have not been fully researched. Some sections may be incomplete or reflect inaccuracies present in initial sources. Please check the References at the bottom for further information and perform your own additional assessment. Please feel free to contribute by adding any missing information or sources you come across. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.
Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!
In 2018, a string of Bitcoin Gold 51% attacks targeted multiple platforms including Binance. In response to these attacks, the block confirmation times were increased.
This exchange or platform is based in Cayman Islands, or the incident targeted people primarily in Cayman Islands.[1][2][3][4][5]
About Binance
"Binance is a cryptocurrency exchange which is currently the largest exchange in the world in terms of daily trading volume of cryptocurrencies.[2] It was founded in 2017 and is registered in the Cayman Islands."
"Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency."
About Bitcoin Gold
"Bitcoin Gold was the second fork of Bitcoin when it went live in November 2017 (amidst a few technical issues that occurred pre-launch). Albeit being marketed as a cryptocurrency supporting decentralized mining through an ASIC-resistant mining algorithm, critics of the cryptocurrency called it a “cash grab.” Yet, most bitcoin holders were given free BCG coins relative to their holdings of Bitcoin, so most welcomed the “free money.”"
The Reality
"In a May 11th blog post, the Bitcoin Gold team made Bitcoin Gold (BTG) holders aware of attempts to attack the Bitcoin Gold network. Exchanges were also asked to guard against the attack since potential attackers were likely to profit by double spending coins in exchange transactions."
According to a blog post by MentalNomad, "some Exchanges were [reportedly] operating with less than five confirmations required"[6].
What Happened
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
"Exchanges including Bittrex, Binance, Bithumb, Bitinka, and Bitfinex lost an estimated $18 million worth of coins due to the double spend attack."
| Date | Event | Description |
|---|---|---|
| May 11th, 2018 | Main Event | Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here. |
| May 16th, 2018 4:37:54 PM MDT | First Attack Reported | The reported time of the first attack on block 528735[6]. |
| May 18th, 2018 6:51:47 AM MDT | Bitcoin Gold Forum Discussion | Bitcoin Gold Forum user MentalNomad starts a thread warning about an "unknown party with access to very large amounts of hashpower" who is "trying to use “51% attacks” to perform “double spend” attacks to steal money from Exchanges"[6]. |
| May 18th, 2018 8:17:21 AM MDT | Attacker Addresses Reported | The addresses of the double spend attacker are reported on the forum thread[6]. |
| May 18th, 2018 8:33:06 AM MDT | List Of Reverted Blocks Provided | The forum thread provides a list of 17 valid forks which have happened on the bitcoin gold blockchain[6]. |
| May 18th, 2018 11:25:40 PM MDT | Final Attack Reported | The reported time of the final attack on block 529048[6]. |
Technical Details
A 51% attack consists of a party renting or obtaining enough hashing power that they can exceed the hashing rate of the normal blockchain. This allows them to mine blocks faster than the original chain. They will spend funds on the original chain, and send funds to themselves on their alternate chain. Once the funds on the original chain are accepted and they receive whatever they swapped for on an exchange, they broadcast all of the alternative chain blocks, which the network had to accept because that chain is longer.
First Attack On Block 528735
May 16, 2018 10:37:54 PM UTC
"Scrutiny of unusual activity on the network has revealed the scheme, in which "double spending" attacks have been launched against cryptocurrency exchanges trading the virtual currency."
"Traders of the coin, established in 2017 through a hard fork of the main Bitcoin (BTC) network, have been tracing the attack since last week."
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it."
- Funds:
GTNjvCGssb2rbLnDV1xxsHmunQdvXnY2Ft - Receive mined coins:
GXXjRkdquAkyHeJ6ReW3v4FY3QbgPfugTx
See valid reverts as #15 on [6].
Total Amount Lost
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it."
Immediate Reactions
Bitcoin Gold updated their blog to indicate that the 51% attack had occurred on the network.
Blog Post Updated
"The blog post was updated on the 24th of May to announce that a dreaded 51% attack occurred on the network between the 16th and the 19th of May 2018. The attack on Bitcoin Gold also involved rented hashpower from cloud mining services."
Delisting From Bittrex
"Bittrex delisted BTG following the BTG team’s refusal to pay compensation of 12,372 BTG. Bittrex blamed the Bitcoin Gold team for negligence and demanded compensation in order to keep the cryptocurrency listed."
"In response, the Bitcoin Gold team stated that 51% attacks are a known risk in the ecosystem. They added that the BTG organization was not responsible for the attack since it was not caused by flaws in the Bitcoin Gold blockchain or code. Additionally, the team cited warnings it gave prior to the attack as well as the assistance it gave exchanges for defending themselves."
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Tracing Of Funds
"Traders of the coin, established in 2017 through a hard fork of the main Bitcoin (BTC) network, have been tracing the attack since last week."
"A Bitcoin Gold wallet linked to the double spend scheme has received over 388,000 BTG, which is currently worth about $18 million, according to data from CryptoCompare. Most of the coins have now been transferred to various other addresses and only about 13,000 BTG are left in it."
Network Upgrade
"The BTG team also claimed that the network upgrade carried out in July 2018 will reduce the likelihood of another attack on the network. Bittrex ended up delisting the coin, along with several others. Bitcoin Gold still survived as the 27th most capitalized coins on CoinMarketCap."
Total Amount Recovered
There do not appear to have been any funds recovered in this case.
What funds were recovered? What funds were reimbursed for those affected users?
Ongoing Developments
What parts of this case are still remaining to be concluded?
General Prevention Policies
51% attacks can be prevented through a mix of increased block confirmation times and setting checkpoints to prevent large-scale rollbacks. This means the exchange will not credit deposited funds, or nodes will be prevented from accepting the attacking chain.
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ Five most prolific 51% attacks in crypto: Verge, Ethereum Classic, Bitcoin Gold, Feathercoin, Vertcoin | CryptoSlate (Sep 29, 2021)
- ↑ Binance - Wikipedia (Nov 9, 2021)
- ↑ Bitcoin Gold suffers double spend attacks, $17.5 million lost | ZDNet (Nov 9, 2021)
- ↑ Double Spend Attacks on Exchanges - #24 by MentalNomad - Announcements and Site Feedback - The BTG Community Forum (Nov 9, 2021)
- ↑ Bitcoin Gold Hit With 51% and Double Spend Attacks, $18 Million Stolen | Cryptoglobe (Nov 9, 2021)
- ↑ 6.0 6.1 6.2 6.3 6.4 6.5 6.6 Double Spend Attacks on Exchanges - Announcements and Site Feedback - The BTG Community Forum Archive August 8th, 2018 1:30:29 AM MDT (Apr 29, 2022)