51% attacks on blockchain lead to $20m of cryptocurrency theft

After a quiet 2017, 51% Blockchain attacks have hit with a vengeance this year…

Cryptocurrency projects have found themselves vulnerable this year to what’s called a 51% attack. This is as per a new report from Group-IB, that has revealed five different cryptocurrency projects have fallen prey to such attacks in 2018. Furthermore, that those attacks have yielded the hackers concerned around $20m in ill-gotten gains.

What’s particularly interesting about this is just how barren the landscape of 51% attacks was last year. There was no recorded successful attack at all in 2017, inevitably raising alarm bells for what’s gone wrong this year.

A 51% attack is where a hacker gets control of 51% of a Power-of-Work blockchain, and thus has control over it. With that control they can affect the verification of transactions, put a halt to mining, and in theory, create cryptocurrency. Which is what appears to have happened.

For the attackers have deployed a technique called double spending, which means they effectively magic up an alternative, hidden blockchain, that they then direct to verify their transactions. Thing is, in that case the transactions are fake, but still the cryptocurrency is created. And that’s what the hackers make off with.

They’ve managed to do it too by focusing their primarily gaze on smaller, off-radar cryptocurrency projects, with the Verge coin falling prey on two separate occasions. Litecoin Cash has been affected too, but it was Bitcoin Gold that was hit by distance the hardest. Some $18m was stolen this way, that’s had ramifications for that particular crypto ever since.

You can find more on Group-IB and its work, here.

Image: BigStock

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