BSV sheds 5% after the network suffers malicious 51% attack

  • Bitcoin SV suffered a 51 percent attack on Tuesday morning, heightening the risk of invalidating honest miners’ blocks.
  • Several exchanges have delisted the Bitcoin breakaway due to its founder’s behavior and poor network security.

Bitcoin SV (BSV) suffered a “massive” 51 percent attack at 11:46 a.m on Tuesday. The attack was first noticed by Lucas Nuzzi, a network data product manager at CoinMetrics crypto intelligence firm.

“[…] some serious hashing power was unleashed today at 11:46 AM and attackers are succeeding. Over a dozen blocks are being reorgd & up to 3 versions of the chain being mined simultaneously across pools,” Nuzzi’s tweet read.

Later on, CoinMetrics verified Nuzzi’s report tweeting,

All of our FARUM nodes witnessed a deep reorg with a max depth of 14 blocks.

Additionally, CoinMetrics noted that no further attacks had been witnessed, but that “synchronization conflicts” were present in major mining pools. The pools were mining on “completely different” block heights at the moment, Nuzzi told CoinDesk late Tuesday.

Bitcoin SV malicious miners attack

A 51 percent attack occurs when malicious miners gain control of over 50 percent of a Proof-of-Work blockchain. They can influence block reorganization, an important feature meant to prevent incidences of two miners mining the same block. If the same block is mined twice, the system defaults to the longest chain. Therefore, if malicious miners mine faster than honest miners, they may generate a longer chain thereby invalidating honest miners’ blocks.

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In response to the attack, the Bitcoin Association, a non-profit organization supporting BSV, directed node operators on neutralizing the attack. Nuzzi reported that the identity of the attacker is yet to be uncovered. However, CoinMetrics is still investigating the attacker’s chain for “traces of double spends targeting exchanges.”

According to Bitinfocharts, the BSV hashrate dropped by about 50 percent between Monday and Tuesday. Nuzzi however, stated that upheaval following the reorg makes it hard to estimate the drop in hashrate.

Previous network security attacks

Reportedly, the prominent Bitcoin Cash spin-off has in the past suffered four successive attacks between June 24 and July 9. It remains unclear whether some users lost money, but the fact that double-spending happened rattled the market.

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Shortly afterward, a number of companies suspended BSV services including trading, deposits, and withdrawals. A number of exchanges have also delisted the digital currency including Binance, Coinbase, and Kraken. Other than network security issues, Craig Wright’s behavior also influenced the series of delisting. The BSV founder and controversial Australian entrepreneur, who has also claimed to be Bitcoin’s Satoshi Nakamoto, has a knack for pursuing his critics with lawsuits. Following the attack, the risk for further delisting is now high.

These events seem to be weighing heavily on the BSV price. BSV is now trading at $135, more than 70 percent down from its May high of $461. The coin has also shaved off roughly 5 percent in the last 24-hours following the latest events. Despite a 17.9 percent gain over the last fortnight, BSV has registered a 41.0 percent plummet over the last year according to our data.

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