Blockchain’s Once-Feared 51% Attack Is Now Becoming Regular

Blockchain's Once-Feared 51% Attack Is Now Becoming Regular

Monacoin, bitcoin gold, zencash, verge and now, litecoin cash.

At least five cryptocurrencies have recently been hit with an attack that used to be more theoretical than actual, all in the last month. In each case, attackers have been able to amass enough computing power to compromise these smaller networks, rearrange their transactions and abscond with millions of dollars in an effort that's perhaps the crypto equivalent of a bank heist.

More surprising, though, may be that so-called 51% attacks are a well-known and dangerous cryptocurrency attack vector.

While there have been some instances of such attacks working successfully in the past, they haven't exactly been all that common. They've been so rare, some technologists have gone as far as to argue miners on certain larger blockchains would never fall victim to one. The age-old (in crypto time) argument? It's too costly and they wouldn't get all that much money out of it.

But that doesn't seem to be the case anymore.

NYU computer science researcher Joseph Bonneau released research last year featuring estimates of how much money it would cost to execute these attacks on top blockchains by simply renting power, rather than buying all the equipment.

One conclusion he drew? These attacks were likely to increase. And, it turns out he was right.

"Generally, the community thought this was a distant threat. I thought it was much less distant and have been trying to warn of the risk," he told CoinDesk, adding:

"Even I didn't think it would start happening this soon."

Inside the attacks

Stepping back, cryptocurrencies aim to solve a long-standing computer science issue called the "double spend problem."

Essentially, without creating an incentive for computers to monitor and prevent bad behavior, messaging networks were unable to act as money systems. In short, they couldn't prevent someone from spending the same piece of data five or even 1,000 times at once (without trusting a third party to do all the dirty work).

That's the entire reason they work as they do, with miners (a term that denotes the machines necessary to run blockchain software) consuming electricity and making sure no one's money is getting stolen.

To make money using this attack vector, hackers need a few pieces to be in place. For one, an attacker can't do anything they want when they've racked up a majority of the hashing power. But they are able to double spend transactions under certain conditions.

It wouldn't make sense to amass all this expensive hashing power to double spend a $3 transaction on a cup of coffee. An attacker will only benefit from this investment if they're able to steal thousands or even millions of dollars.

As such, hackers have found various clever ways of making sure the conditions are just right to make them extra money. That's why attackers of monacoin, bitcoin gold, zencash and litecoin cash have all targeted exchanges holding millions in cryptocurrency.

By amassing more than half of the network's hashing power, the bitcoin gold attacker was able to double spend two very expensive transactions sent to an exchange.

Through three successful attacks of zencash (a lesser-known cryptocurrency that's a fork of a fork of privacy-minded Zcash), the attacker was able to run off with about more than 21,000 zen (the zencash token) worth well over $500,000 at the time of writing.

Though, the attack on verge was a bit different since the attacker exploited insecure rules to confuse the network into giving him or her money. Though, it's clear the attacks targeted verge's lower protocol layer, researchers are debating whether they technically constitute 51% attacks.

Small coins at risk

But, if these attacks were uncommon for such a long time, why are we suddenly seeing a burst of them?

In conversation with CoinDesk, researchers argued there isn't a single, clear reason. Rather, there a number of factors that likely contributed. For example, it's no coincidence smaller coins are the ones being attacked. Since they have attracted fewer miners, it's easier to buy (or rent) the computing power necessary needed to build up a majority share of the network.

Estimated Profitability of 51% Attacks

Further, zencash co-creator Rob Viglione argued the rise of mining marketplaces, where users can effectively rent mining hardware without buying it, setting it up and running it, has made it easier, since attackers can use it to easily buy up a ton of mining power all at once, without having to spend the time or money to set up their own miners.

Meanwhile, it's grown easier to execute attacks as these marketplaces have amassed more hashing power.

"Hackers are now realizing it can be used to attack networks," he said.

As a data point for this, someone even erected a website Crypto51 showing how expensive it is to 51% attack various blockchains using a mining marketplace (in this instance, one called NiceHash). Attacking bytecoin, for example, might cost as little as $719 to attack using rented computing power.

"If your savings are in a coin, or anything else, that costs less than $1 million a day to attack, you should reconsider what you are doing," tweeted Cornell professor Emin Gün Sirer.

On the other hand, larger cryptocurrencies such as bitcoin and ethereum are harder to 51% attack because they're much larger, requiring more hashing power than NiceHash has available.

"Bitcoin is too big and there isn't enough spare bitcoin mining capacity sitting around to pull off the attack," Bonneau told CoinDesk.

But, while Crypto51 gives a rough estimate, ETH Zurich research Arthur Gervais argued to take the results with a grain of salt, since it "ignores" the initial costs of buying hard and software. "Thus, the calculations are oversimplified in my mind," he added.

The solution: a longer wait

Gervais further argues it's worth putting these attacks into context. Though a 51% attack is perhaps the most famous cryptocurrency attack, it's not necessarily the worst in his mind.

He pointed to other malicious bugs, such as one found in zcoin, where, if exploited, a user would have been able to print as many zcoin as they would like. But 51% attacks are still troubling since they can still be worthwhile sometimes, impacting exchanges or whoever happens to be in the crosshairs of the attacker.

"As an industry, we have to put an end to this risk," Viglione said, pointing to efforts on zencash to stop this from happening again.

Either way, one way for users or exchanges to make sure they aren't defrauded is to only accept money that's older, or has been buried by more blocks of transactions, called "confirmations." The more confirmations there have been, the harder the funds are to steal in a 51% attack.

Initially, exchanges where bitcoin gold was stolen required only five confirmations, and the attacker was able to reverse all of them with their hashing power. In response to the attacks, they have upped the number of confirmations to 50, which has successfully plugged up the attacks, at least for now.

Because of this, developers and researchers contend bigger blockchains with more hashing power behind them are more secure since they require fewer confirmations.

As bitcoin entrepreneur John Light put it:

"Remember this next time someone tells you they use altcoins because they're 'cheaper' to use."

 

 

Alyssa Hertig Jun 8, 2018 at 04:00 UTC

David Ogden – Http://markethive.com/david-ogden

Bitcoin (BTC) Price Analysis – Neckline Test Taking Place, Upside Break Looming?

Bitcoin (BTC) Price Analysis – Neckline Test Taking Place, Upside Break Looming?

 

Bitcoin is at a crucial level as it waits to confirm a reversal pattern with an upside break.

Bitcoin appears to have completed the complex inverse head and shoulders reversal formation and is currently testing the neckline to confirm the potential uptrend. The chart pattern spans $7,000 to $7,800 so an upside break could last by the same height.

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. However, the gap between the two is narrowing to signal weakening bullish momentum.

RSI is moving up to indicate that buyers still have some energy to push for more gains but the oscillator is nearing overbought levels to suggest a slowdown as well. Similarly stochastic is pointing up to reflect bullish pressure but is also approaching overbought conditions.

The latest bounce in bitcoin is being attributed to the rise in volumes from Venezuela as the country’s crisis is pushing citizens to look into alternative financing. This has been similar to the case in Greece when banks and exchanges were shut down in the aftermath of the debt crisis.

Apart from that, persistent Brexit issues appear to be haunting financial markets again while trade war fears linger. The UK is facing an important cabinet vote that could set the course for UK laws in the Brexit transition period and it looks like lawmakers are at odds with PM May’s backstop proposal. Meanwhile, tariffs recently announced by the US are keeping jitters in place ahead of the weekend G7 meeting.

The dollar has also been on weak footing, which explains some safe-haven flows to cryptocurrencies. Note that the US currency has been unable to sustain a bounce even after seeing upbeat data recently, which suggests that the trade factor has been keeping gains limited, leaving other assets like bitcoin to take advantage.

 

 

 

Author Rachel Lee On Jun 7, 2018

David Ogden – Http://markethive.com/david-ogden

Bitcoin [BTC] has niche investors, Apple and Twitter CEOs invest!

Bitcoin [BTC] has niche investors, Apple and Twitter CEOs invest!

Bitcoin [BTC] has niche investors, Apple and Twitter CEOs invest!

During an interview with CNBC, Apple co-founder, Steve Wozniak calls Bitcoin [BTC] ‘pure’. In addition to this, Steve also mentions that he is not a Bitcoin [BTC] investor but only bought Bitcoin [BTC] to experiment.

Steve Wozniak talks about how much he is intrigued with Bitcoin and mathematics. He also mentioned that he currently owns one Bitcoin and two Ether. He also constantly emphasizes on how similar Bitcoin is to the internet and expects Bitcoin to bring across the revolution internet has brought across.

The Apple Co-Founder talks about his strong belief in mathematics, purity, and science as defining the world. According to him, Bitcoin is mathematically defined as a circle and there’s a way that it’s distributed. He considers Bitcoin [BTC] pure as there’s no person or company running it despite which it continues to grow and survive and this to him is ‘something that is natural… and more important than human conventions.’

He also says that the main reason he sold his $700 BTC was due to the overwhelming price fluctuations in the market. He says:

“I never invested in Bitcoin, I was actually a little worried. Once, all of a sudden the price went up and I had a lot of money in Bitcoin, I said, wait a minute, I only bought to experiment.”

When asked whether Bitcoin will continue to dominate the market with the rise of other platforms like Ethereum and Ripple, he replied:

“We’ve seen a hundred sort of Bitcoin copies, some are faster, some are centralised control, some have other advantages, only Bitcoin is pure digital gold… I totally buy into that…How the math on Bitcoin that it was so correct that it still works.”

He also talks about Bitcoin [BTC]’s price in the future and says that because of Bitcoin’s regulated quantity, the value is down to the demand and supply, and Bitcoin saw a hike to $20000 for a period because ‘more and more people want it.’ He adds:

“So if the demand increases and becomes more and more popular for more things and people start using it, there is no supply; it’s limited. In terms of dollar, yes bitcoin will go up and up in time… things might be sloppy at first and things that change that much in life take a long time to change, they tend to go slowly. We had a crash in the internet age and I see that going on with a lot of blockchain things including Bitcoin itself right now.”

Steve further says that it’s going to take about 10-15 years for Blockchain to become the next widespread technology. He compares blockchain to the internet and says that just the way internet had promised to provide so many services online like bank reservations and airplane reservations, it faced a big crash as all the companies had competed. He continues:

“And here it is, in 2018 all of our life, everything we do with these third-party apps to this day, oh my gosh, this saved me, such a wonderful world. It was the world we talked about than but it just doesn’t happen instantly because people will have to have their mind set changed, culture and tradition and status quo and the way things are doesn’t change that rapidly/ instantly when it’s that huge.”

 

Simran Alphonso Published on June 6

David Ogden – Http://markethive.com/david-ogden

Bitcoin ‘Dies’ for the 300th Time, Trading At $7,300

Bitcoin ‘Dies' for the 300th Time, Trading At $7,300

Bitcoin ‘Dies’ for the 300th Time, Trading At $7,300

Bitcoin (BTC) has recently “died” for the 300th time, according to 99Bitcoins Bitcoin obituary list. The cryptocurrency faced its “most recent death” in the latest “obituary” provided by Forbes.

Bitcoin celebrates its 300th death anniversary following an article from Forbes published May 30. The article claims that Bitcoin’s “Achilles Heel” is the huge amount of electricity required by crypto mining operations.

According to Forbes, Bitcoin miners underestimate the risks associated with energy consumption on the global scale. The report also stresses such issues as power theft and the cost of mining equipment that is becoming more and more expensive:

“Predictably, Bitcoin miners downplay both their energy usage and the threat it poses to ordinary people, ordinary businesses and the planet that they occupy.”

At the time of the latest “death” recorded by 99Bitcoins, BTC was trading at $7,312. In December, when Bitcoin died it’s 200th death, the BTC price hit the $11,000 mark. According to 99Bitcoins stats, the major cryptocurrency “died” 62 times this year.

This year, various pundits and public figures proffered their own suggestions as to why Bitcoin is doomed to fail, including the notorious Warren Buffet statement that Bitcoin is "probably rat poison squared," and Bank of England Governor Mark Carney’s claim that BTC has “failed” as a currency.

While Bitcoin has recently faced its 300th death and dropped in value by around 20 percent last month, several prominent figures in the tech and business worlds have made bullish statements on its future. Recently, Apple co-founder Steve Wozniak said that “only Bitcoin is pure digital gold,” reiterating the statement of Twitter CEO Jack Dorsey that in a decade BTC will be the “single currency” of the world and the Internet.

According to Cointelegraph’s price index, BTC is trading at $7,407 at press time, having gained around 4 percent over the past week.
 

Author Helen Partz

Posted by David Ogden Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Ethereum (ETH) Price Analysis – Was That A Bullish Breakout?

Ethereum (ETH) Price Analysis – Was That A Bullish Breakout?

Ethereum appears to be breaking above its channel top to signal a reversal.

 

Ethereum had been trending lower inside a descending channel on its 4-hour time frame, but a breakout appears to have taken place. This signals that a reversal is imminent, but price might need to clear a few more hurdles to confirm this.
 

The 100 SMA is still below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is still more likely to resume than to reverse.
 

The gap between the moving averages is widening to reflect strengthening bearish pressure. However, price has also broken past the 100 SMA dynamic resistance to signal a pickup in bullish momentum. Ethereum might still need to move past the 200 SMA dynamic inflection point to confirm that an uptrend is underway.
 

However, RSI is already indicating overbought conditions to show that sellers could still return and push price back inside the channel. Stochastic is also in the overbought zone to reflect exhaustion among buyers, and turning lower could bring sellers back in.

The rebound in cryptocurrencies late last week contributed to a strong rise in ethereum price, but it remains to be seen if the rallies can be sustained. Month-end flows were also pinpointed as a factor leading to the climb, although it’s still worth noting that the market capitalization increased from $304 billion from the end of May to $350 billion over just three days.
 

In an OmiseGO AMA session, Ethereum founder Vitalik Buterin explained how the network will be able to process 1,000,000 transactions with the solutions of Plasma and Sharding.
 

It also helped that the dollar was unable to draw much support from stronger than expected NFP data as trade war concerns appeared to dominate its price action. There are no major reports due from the US economy so trade-related headlines could influence dollar behavior and draw enough risk flows back to alternative assets like altcoins.

Author : Rachel Lee On Jun 4, 2018

 

Posted by David Ogden Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Bitcoin Cash Price Weekly Analysis – BCH USD Gaining Upside Momentum

Bitcoin Cash Price Weekly Analysis – BCH USD Gaining Upside Momentum

Key Points

  • Bitcoin cash price is back in a positive zone and $1,000 with bullish signs against the US Dollar.

  • There was a break above a crucial bearish trend line with resistance near $980 on the 4-hours chart of the BCH/USD pair (data feed from Kraken).

  • The pair is now above the $1,040 level and the 100 simple moving average (4-hours).

Bitcoin cash price is gaining bullish momentum above $1,000 against the US Dollar. BCH/USD has to move above $1,100 to accelerate gains in the near term.
 

Bitcoin Cash Price Trend

This past week, there were mostly range moves below $1,040 in bitcoin cash price against the US Dollar. The price was struggling to gain pace above the $1,020 and $1,040 resistance levels. Finally, there was an upside break and the price settled above the $1,040 level and the 100 simple moving average (4-hours). During the upside move, the price broke many hurdles, including the $1,000 barrier.
 

Moreover, there was a break above the 38.2% Fib retracement level of the last decline from the $1,323 swing high to $871 low. More importantly, there was a break above a crucial bearish trend line with resistance near $980 on the 4-hours chart of the BCH/USD pair. The pair is now placed nicely in a positive zone above $1,040. At the moment, the 50% Fib retracement level of the last decline from the $1,323 swing high to $871 low at $1,096 is acting as a resistance. A break and close above $1,100 is needed for more gains towards $1,200.

Looking at the chart, the price action is positive above $1,000. On the downside, the broken resistances at $1,040 and $1,000 are likely to act as supports if the price moves down.

 

Looking at the technical indicators:

 

4-hours MACD – The MACD for BCH/USD is gaining momentum in the bullish zone.

4-hours RSI (Relative Strength Index) – The RSI for BTC/USD is now well above the 60 level.

Major Support Level – $1,000

Major Resistance Level – $1,100

 

Author AAYUSH JINDAL | JUNE 3, 2018 | 5:08 AM

Posted by David Ogden Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Buy bitcoin now while it’s still cheap, says cryptocurrency hedge-fund owner

Buy bitcoin now while it's still cheap, says cryptocurrency hedge-fund owner

  • Cryptocurrencies are cheap right now, says Dan Morehead, founder of Pantera Capital Management. So it's a good time to buy.

  • Bitcoin was priced around $7,500 on Thursday at 5:30 p.m. ET — down more than 50 percent from December 2017 highs of approximately $19,500.

 

Bitcoin may have reached its bottom this year, Dan Morehead, founder of Pantera Capital Management, told CNBC. So now is a good time to buy.

"All cryptocurrencies are very cheap right now," said Morehead, who serves as CEO and co-chief investment officer of Pantera.

As a whole, cryptocurrencies have declined about 65 percent from their highs this year, he said.

"It's much cheaper to buy now and participate in the rally as it goes," Morehead said Thursday on "Fast Money."

Bitcoin, one of the most popular cryptocurrencies, reached highs of $19,500 last December, only to dip below $6,000 in February. On Thursday evening at 5:30 p.m. ET, bitcoin was priced around $7,500.

The volatile nature of all cryptocurrencies has left market watchers on edge amid looming regulatory concerns. Cryptocurrency is still a largely unregulated industry.

But this might work in investors' favor, Morehead said.

"Many institutions are essentially buying the rumor [of potential SEC regulations] and selling the fact," he said. "Getting invested now so that in three, four, five months when the institutional, quality-regulated custodians that we're hearing about come online, they'll already have their positions."

His tip for investors: Buy a currency once it breaks its 230-day moving average, wait a year and sell.

"Without even thinking about it," Morehead said, "you make an average of 239 percent."

The trader said this strategy is best illustrated in bitcoin, a coin in which it "happened about five times in the last six years," he said.

"That's the essence of this trade: It rarely ever gets cheap to its long-term average," Morehead said. "So today is a good day to be buying."

Pantera Capital Management, which Morehead founded in 2013, is one of the first U.S. bitcoin firms. The company owns about 35 pre-auction ICOs and about 25 liquid blockchain currencies, including XRP, ethereum and bitcoin.

 

 

Author Kellie Ell

David Ogden – Http://markethive.com/david-ogden