51% Attack: ZenCash the Latest Victim of a Suspected Double-Spend Attack 10

51% Attack: ZenCash the Latest Victim of a Suspected Double-Spend Attack

ZenCash is the latest cryptocurrency to suffer a suspected 51% attack in the last two months. Others like Electroneum, Verge, and Bitcoin Gold have also fallen victim to the 51% percent attack – the number one scourge of the poorly secured public blockchain network.

Details of the Attack

According to a report on the ZenCash blog, the attack occurred in the early hours (GMT) on June 3, 2018. The suspected hacker took control of a pool operator rolling back a few transactions. The attacker succeeded in pushing back 38 blocks and carrying out a double spend attack in the space of four blocks. In the end, the suspected attacker performed two double-spend attacks of 6,600 ZEN and 13,000 ZEN respectively. At the current market rate, the hack cost the network about $550,000. The price of ZenCash has declined by 7 percent since the hack.

51% Attack: ZenCash the Latest Victim of a Suspected Double-Spend Attack 11

Details released by ZenCash show that znkMXdwwxvPp9jNoSjukAbBHjCShQ8ZaLib is the suspected pool address. At the end of the exploit, the funds were deposited in this address – zneDDN3aNebJUnAJ9DoQFys7ZuCKBNRQ115. ZenCash is already investigating the attack in tandem with connected exchange platforms. At the time of writing this article, there are no indications as to what the suspected hacker did with the funds.

The attack may have been more severe but for the timely intervention of the team who immediately alerted exchange platforms of the hack. By increasing the confirmations for large deposits, exchange platforms can help in thwarting 51% attacks. According to ZenCash, the hash rate at the time of the exploit was about 58MSol/s. Preliminary indications point to the attacker running a private mining operation with enough hash power to hijack a mining pool. The hacker could also have increased his/her computing power by renting additional hash power.

51% Attacks are all the Rage Right Now

51% Attack: ZenCash the Latest Victim of a Suspected Double-Spend Attack 12

Since April, there have been at least five 51% attacks on four different cryptocurrency networks, including ZenCash. Verge (XVG) has been hit at least two times with more than $2 million lost. Equi-hash-based digital currencies seem to be the most prone to such attacks. In a 51% attack, the hacker gains control of more than half of the computing power of the network. Thus, they manipulate timestamps and manufacture blocks, earning mining rewards. The attacker can also combine this exploit with a double-spend attack which is even more devastating.

Recently, EWN published a story that showed how for less than $1,000 some cryptocurrencies networks could be hacked. The ZenCash hack lasted for about four hours. Based on that report, the hacker may have spent $30,000 in prosecuting the hack. The presence of hash-renting services like NiceHash is undoubtedly a huge problem for smaller blockchains.

The size of a blockchain is usually the best defense against a 51% attack. Electricity and hardware maintenance costs are also an obstacle against carrying out such attacks. However, with hackers being able to rent hash power for a relatively cheap amount, then smaller blockchain surely have a reason to worry. The recent spate of attacks has also added more fire to the ASIC vs. GPU debate and how centralized mining can offer more security for blockchains.

Are you concerned about the recent spate of 51% attacks in the cryptocurrency market at the moment? Will these attacks compromise the integrity of the industry in the long run? Keep the conversation going in the comment section below.

Images courtesy of ZenCash, CoinMarketCap, and Pixabay.