BUY BITCOIN
In the early hours of Sunday morning (UTC time-zone), ZenCash, an upcoming privacy coin, came under a 51% attack.
Another One Bites The Dust
According to the official ZenCash blog, at approximately 2:43 UTC on June 3rd, ZenCash became the target of a 51% attack.
For the uninitiated, a 51% attack is when a malicious person or group takes control of a blockchain through obtaining over 50% of the hashrate, allowing for the hacker(s) to take control of the network.
However, ZenCash’s team was ready for a situation like this to occur.
The team quickly initiated an investigation on the hashrate distribution to confirm that it was, in fact, a 51% attack. While hash rates were being investigated, other members of the ZenCash team simultaneously contacted exchanges to increase confirmation times to help mitigate the risk of a double-spend.
Once the investigation was finished, the ZenCash team still found that there were two double-spent transactions. This meant that the hacker, whoever it was, was permitted to spend their 19,000 ZenCash two times, effectively doubling the worth of their ZenCash.
At current market values, the over 19,600 ZenCash which the hacker double-spent is worth around $558,000, not a figure to laugh at.
ZenCash’s price took a hit in direct correlation with the 51% attack. Just after the hack, ZenCash was from $30 to $28 and still has not fully recovered even though the attack has concluded.
According to the aforementioned blog post, ZenCash ensured that all user funds were safe and encouraged worrisome investors to contact exchanges if deemed necessary.
The blog also mentioned that the team is also working with the exchange affected by the double-spend in an attempt to figure out who the hacker was;
The Zen team will continue monitoring the network and conducting forensic analysis with the affected exchange. All information gathered will be provided to the appropriate authorities.
How Did This Happen?
Due to the increasing number of PoW blockchains, it has become increasingly difficult to secure every single blockchain, as hashing power begins to spread thinly on some algorithms.
Although ZenCash is still a relatively large cryptocurrency compared to some, the hashing power of ZenCash could still be taken over if enough money gets thrown at the problem.
At the time of the hack, the ZenCash blockchain was utilizing over 58 MSols/s. Although this is still a respectable number, it is likely that the hackers rented out a large amount of hash power through a service like NiceHash.
Seeing as the hacker got away with over $550,000 worth of ZenCash as a result, it is fair to assume that the attack cost less than the value of their ZenCash.
These types of attacks have become quite common over the past month, with Verge, Bitcoin Gold, and Electroneum also falling suspect to this method of attack. Due to these attacks, many of these coin’s values took a large hit and still have not recovered.
Unless a network is secured by an absurd amount of hashrate like Bitcoin, Ethereum, and ZCash it is difficult for developers to fully secure a blockchain against a 51% attack.
Image from Shutterstock
