Hackers prove how powerful computers can cheat Bitcoin and blockchain
Niche cryptocurrency ZenCash has been hit by a “51 percent attack,” leading to the theft of hundreds of thousands of dollars worth of tokens. Although problematic in its own right, the attack highlights one of the biggest weaknesses of blockchain platforms like Bitcoin — computing power.
Blockchain backed cryptocurrencies like Bitcoin, Litecoin, and ZenCash, are built on a “proof-of-work” system. That means that the network goes along with what a majority of ‘nodes’ (or miners) say is true. It’s a secure system because to trick it, you need to control more than half of those nodes, or an equivalent amount of computing power.
While that might be difficult for a platform like Bitcoin where there are thousands upon thousands of high-powered mining rigs, it’s much easier to trick smaller cryptocurrency networks. That is exactly what happened with ZenCash, where over a period of four hours, attackers used masses of computing power to take control of the blockchain and create alternate histories, thereby letting them spend their ZenCash twice.
Because the attackers covered their tracks, no one quite knows what they did with it, but no doubt it was profitable. Crypto51 looks at the hash rate, or global computing power currently mining different cryptocurrencies, and how much a 51 percent attack would technically cost to perform if rented from existing networks. In the case of ZenCash, the attacker would theoretically only have had to spend around $30,000 to complete the double-spend hack.
Blockchain networks like Bitcoin, which are far larger, would require a much greater expenditure to complete a 51 percent attack — $717,000 for just one hour, according to Crypto51. Fortunately, there isn’t enough rental power in the world to conduct such an attack, but if an organization was to get a hold of enough hashing power, those currencies are just as vulnerable and could be attacked in much the same way.
ZenCash isn’t the only cryptocurrency that has been hit with a 51 percent attack. As Bitcoinist reports, both Bitcoin Gold and Verge have both been hit in a similar manner in recent months. They required less hashing power than ZenCash, so it’s possible that this latest attack is just another example if a trend of upward trajectory attacks that target much more vulnerable cryptocurrencies and blockchain platforms.
Fifty-one percent attacks aren’t the only problems faced by Bitcoin and public blockchain platforms, though, these developers are trying to solve them.