Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

https://www.ccn.com/bitcoin-gold-hit-by-double-spend-attack-exchanges-lose-millions/

by drexlspivey • 8 years ago

973 514 8 years ago

Knee jerk reaction: Good.

However since it is a 'Bitcoin cash' type coin this will ultimately hurt bitcoin and the community as a whole. I can already see the buzz "Bitcoin double spending attack!" articles

mr_spothawk2• 8 years ago

seems more ammo for the argument by Bitcoin Maximalists - cant easily own/manipulate a larger network

jadedhacker• 8 years ago

Also minimalists.

cm2187• 8 years ago

Particularly when the mining is concentrated in a handful of big players in the same jurisdiction with an authoritarian state...

XR0CSWV3h3kZWg8• 8 years ago

As someone that follows the space partially because it's a really cool story, I am amped about all of the attacks these days! It looks like there weren't any protocol failures or anything that made the attack easier. It's a simple case of 51% attack.

The hashrate for BTG is well below most other coins, a modest miner on another coin could easily switch and execute the attack, then switch back to their main coin and not have to pay large transaction costs for hardware acq or rental costs.

jmeyer2k• 8 years ago

I don't have an opinion on BTC vs. BCH, but I think network innovation through competition of these coins is ultimately a good thing. The free market will dictate what each of them is worth for different use cases. In any case, increased competition will increase the quality of Bitcoin and cryptocurrency as a whole.

m-p-3• 8 years ago

To be fair I had to reread the title, as I initially read Bitcoin without focusing on the word Gold.

rwcarlsen2• 8 years ago

Bitcoin gold uses a different hashing algorithm than bitcoin and bitcoin cash. Because of this, this fork was not able to take advantage of the enormous resources invested in the original bitcoin mining community like bitcoin cash was able to. There is still orders of magnitude more cost involved in attacking bitcoin cash (and bitcoin) than it was to attack bitcoin gold.

[edit] Also - bitcoin gold uses GPU mining - so one does not need to acquire specialized hardware to mine/attack it - and the hardware involved can be resold for other uses recovering a significant part of the capital cost. Or you could just rent it from the cloud.

XR0CSWV3h3kZWg8• 8 years ago

more details here:

https://forum.bitcoingold.org/t/double-spend-attack-on-excha...

Bitcoin gold was a fork to try and decentralize mining. It changed to a proof of work that is supposed to be ASIC resistant. It looks like the typical situation is mining by GPU for equihash (BTG PoW).

BTG hashrate is at ~30MH/s at the moment, where Zcash's hashrate is at ~486MH/s.

I don't have the numbers off hand, but it'd be interesting to see how many GPUs you'd need to pull of a double spend against BTG and if any of the other equihash coins saw a drop off during the attack.

It'd be really interesting if it wasn't a rental attack, but an invested miner just switching over to BTG to achieve the hack.

They reversed 22 blocks, the recommendation is to increase the # of confirmations to rely upon to 50. If you are trying to react to 51% attack doubling the number of confirmations only doubles the cost of attack, and the attacker likely just doubled the number of BTG they have. If they can pay the electricity/rental cost for the attack they have enough BTG to execute the attack in a cost effective manner again.

tedunangst2• 8 years ago

If the exchange is aware of the attack, they may also freeze his account, so that all the funds will be locked inside the Exchange. A failed 21 block attack performed with a 10,000 BTG deposit where the Exchange freezes the account in time will result in a 10,262.5 BTG loss for the attacker. (From link.)

That sounds problematic. If I deposited coins and the exchange determined I was attacking them (how does that work beforehand?) to confiscate my money I'd be pretty miffed.

cesarb• 8 years ago

Not only that, but also an attacker can wait until the money is "safe" outside the exchange before revealing the attack. If the attacker really has more than half of the hash rate, there's no time limit; the malicious chain will always be longer than the innocent one.

trsohmers• 8 years ago

Except Bitmain has announced and will be shipping to preorders the first Equihash ASIC (Antminer z9) in July... only 3000 z9's would be needed to equal 30 Megahash, which would be $6M at the z9's $2k price tag. Bitmain obviously has been mining themselves with the z9's for a while, so I would bet that they noticed this and jumped on it before shipping their "lightly used" units out.

s73v3r_5• 8 years ago

"It changed to a proof of work that is supposed to be ASIC resistant."

These are the absolute worst. All they're doing is causing the cost of graphics cards to go up.

XR0CSWV3h3kZWg8• 8 years ago

It's great if you own NVDA!

guiomie3• 8 years ago

I run around 630 sol/s per 1080ti GPUs, each costed me around 950$. You'd also need to add the electricity in there, I think the challenge is to control an infrastructure being able to do over 15 MH/s as opposed to having the capital.

icook• 8 years ago

I was curious about the cost as well, so I ran some rough numbers.

417.5 BTC/GH/day for equihash if you're renting from nicehash [1]. Block interval 10 minutes [2]. 144 blocks per day target yields 0.0869 BTC/block, so cost of the 22 block reversal was ~1.91 BTC, or roughly $15k.

I'm curious if this was done as one large deposit, or many smaller deposits. I've imagined a system where block confirmations required are based on a computed cost of attack done like I did above, which would be pretty effective for very large single transaction double spends. A bit trickier to handle multiple deposits spread across multiple user accounts.

[1] https://api.nicehash.com/api?method=simplemultialgo.info

[2] https://bitcointalk.org/index.php?topic=2284289.0;all

xur172• 8 years ago

I'm curious how many other smaller PoW currencies are vulnerable to something like this.

XR0CSWV3h3kZWg8• 8 years ago

As the space matures I'd love to see a company that offers double spend insurance for a given tx.

For example changes could wait for 10 minutes worth of blocks then request a quote for double spend insurance. The company evaluates the probability of a double spend and maybe even has a couple standing contracts with rentable hashing power to be able to target smaller PoW chains and prevent any double spend attack.

There are lots of interesting and cool problems to be solved in evaluating the safety of a given tx. Unfortunately I don't know if the space is mature enough that exchanges would actually use the service.

xur172• 8 years ago

You can rent hashing power on Nicehash, which currently has ~77MSol/s available for rent. I'm not 100% familiar with how the auction process works, but it looks like I could purchase 26MSol/s via a fixed contract for 1 hour for ~1BTC.

Am I misunderstanding something here, or can I maintain a 51% attack right now for ~$8k an hour. This can't be right.

Uberphallus2• 8 years ago

It is risky, but it is right, that's exactly why took a while to happen. A relatively small botnet can overtake many smaller coins in hash power in no time, that's the hypothesis where I'd put the money.

mihaifm• 8 years ago

It should come lower than that...rental price seems to be around 0.5 BTC/MSol/day, so the price for one hour would be 0.5 * 26 / 24 = 0.54 BTC, roughly $4k

hinkley3• 8 years ago

Not every distributed consensus algorithm is happy with 51%. If you increased the minimum to 60% you’d increase the number of machines the attacker requires by 50%.

If 100 machines play fair, >50% requires 101 evil machines, but >60% requires 151 evil machines.

Rodyland• 8 years ago

I think you're misunderstanding the meaning behind a 51% attack?

An honest network participant will accept the chain with the largest accumulated proof of work. This is necessary to resolve forks of the chain, which are a natural occurrence.

A 51% attack means that the attacker can create a chain with more work than the rest of the network.

The idea that you can say "we require 60%" makes no sense by itself - you have to say what you actually mean in the context of a competitive and adversarial distributed proof of work blockchain network...

Maybe you have some ideas how to avoid history-rewriting attacks, in which case you should write a white-paper and launch your own sh1tcoin or ICO (only half joking).

ada1981• 8 years ago

Curious if this is illegal in anyway?

I suppose there will be increasing incentive to do the numbers on the hash cost to take over a coin and to execute these attacks.

Neat.

mike-cardwell7• 8 years ago

I think stealing is illegal, yes.

sizzzzlerz• 8 years ago

but what is the jurisdiction?

patmcc2• 8 years ago

Is this stealing by whatever definition police/the courts currently use? Isn't it an intentional part of the design of a cryptocurrency that decisions are made by a consensus based on hashing power?

If you have 51% of the hashing power, you have control over that cryptocurrency; that's by design. Can you really steal at that point?

edit: to those replying, I'm not saying this double spend is ethically fine, or not theft in the common parlance. I'm saying it's not entirely clear to me a court would find this to be theft. Think about the Ethereum hard fork to undo the DAO hack; there, a majority of the hashing power undid a bunch of transactions. I wouldn't call that theft (because it was undoing a hack?) but it doesn't seem that different to this situation.

spookthesunset4• 8 years ago

I think stealing is illegal, yes.

Code is law, bro. These fine chaps simply gathered enough resources to execute a slightly different code-path than before.

The folks whose value was stored in Bitcoin Gold should have read the source code before committing any funds to the blockchain. Had they done so, it would have been very clear that this feature was baked right into the source code.

And yes, this is sarcasm.... but only kinda sorta--bitcoiners wanna live in a Truly Free Unregulated Market, free from statist jack booted thugs stealing their wealth at gunpoint... guess what, double spend attacks where everybody loses is the end result. Sorry for their loss....

banachtarski• 8 years ago

Sure but who regulates it :)

yborg• 8 years ago

What exactly was stolen here? This isn't legally recognized money. And the spend was of the attacker's own coins. The exchange into another cryptocurrency or fiat currency is fraudulent I suppose, but isn't that on the transacting exchange?

49bc3• 8 years ago

Satoshi really downplayed 51% attacks in his/her original whitepaper[1]:

The incentive may help encourage nodes to stay honest. If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth.

Apparently he didn't realize that coins could quickly be transferred to other crypto and not held, so who cares about the value of the stolen goods.

[1] https://bitcoin.org/bitcoin.pdf

XR0CSWV3h3kZWg8• 8 years ago

Yeah in the next couple years I'd expect to start seeing smaller PoW chains wither away due to attacks like this and exchanges starting to have prohibitively high conf times as they'll need to protect them selves from attacks like this.

Merchants are probably fine.

gowld3• 8 years ago

The point is that stolen goods cost as much as mined goods, so why would an attacker prefer to steal?

(Unless they are trying to vandalize the ecosystem)

49bc3• 8 years ago

The calculus to steal compared to mining is actually much cheaper. Just briefly hold 51% while you double spend some massive wallets.

baddox2• 8 years ago

But wouldn't the long-term honest mining be more profitable than a single hit and run? Kinda the same reason that when you go to a restaurant the restaurant owners almost always exchange food for money rather than rob you and leave town forever. If you own a restaurant it's generally more profitable to run it honestly than run away with a one-time dishonest payoff.

mrep4• 8 years ago

Because you don't have to pay for the long term mining equipment and instead can just rent them from AWS/GCP/Azure for the attack.

If you did buy them though, you could attack cryptocurrencies one by one stealing money from a bunch of different ones.

I think both situations would be more profitable.

v_lisivka• 8 years ago

You cannot mine all kinds of coins at same time, so why not be honest in one network and hit and run in another?

dpiers• 8 years ago

Not if it destroys the credibility of a rival coin, which I suspect could be the case here. Many in the "real Bitcoin" community call Bitcoin Cash a fraud because its existence reveals the specious value of their "real" cryptocurrency.

Executing a double spend attack on Bitcoin Cash would be a massive success for Bitcoin owners. Same goes for Bitcoin Gold.

You could even create a mining pool/network - let's call it CoinFucker - where every now and then the pool's resources were diverted to attack a rival coin. Doing so damages that coin's reputation, and in doing so reduces the competition. This would be a great way for the majority of mining/computational power to squash would-be rivals.

s73v3r_5• 8 years ago

Depends on if you feel that the crypto would continue to have value in the long term. If you've amassed that much power (or are close to it), and you didn't feel the coin was going to hold value long term, why not?

mikekchar• 8 years ago

I think it's probably fair to say that he/she did not anticipate people spinning up a whole bunch of crypto-currencies and that those crypto-currencies would be worth something. How many coins are out there that are worth millions of dollars to people speculating? I certainly wouldn't have given that idea credence at the time Satoshi wrote the original whitepaper.

I personally thought that BTC would either be successful (in that it would be a useful currency) or that it would tank. I did not anticipate people dumping piles of money into it to speculate on its value. I certainly did not anticipate a bunch of wannabe coins sitting on millions and providing practically no value to anyone.

It's a testament to the number of people who are desperate to get rich. I probably should have taken a cue from the lotteries...

213• 8 years ago

I'm pretty sure he did.

It's not like we don't have dollars and euros and so on, and silver and gold in the past.

I did not anticipate people dumping piles of money into it to speculate on its value.

98% of trading in euros and dollars is pure speculation.

AlexCoventry3• 8 years ago

The notion that there would be other cryptocurrencies was just not part of the worldview, back then.

paulie_a• 8 years ago

I am just going to say two things: 1 it was only a matter of time 2 LoL

joejerryronnie• 8 years ago

But what about my Lambo?!!

davesque3• 8 years ago

Exchange owners probably already have lambos.

mike-cardwell7• 8 years ago

Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

We could really do with a webpage with a list of crypto currencies, the hashing power currently behind them, and how much it would cost somebody to take over 50% of the network.

Or does that already exist?

drexlspivey5• 8 years ago

Maybe all that energy spent to secure the chain is not so bad after all.

jacquesc• 8 years ago

So it's not a complete waste of natural resources because it helps secure "the chain"?

patmcc2• 8 years ago

>>Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

And maybe they're worthless even then. Time will tell on that.

ggg9990• 8 years ago

Interesting point. The cryptocurrency energy consumption problem will never be solved, since if it is, it will be economically feasible to attack. So cryptocurrency adoption in the mainstream will require massive electricity consumption.

bennofs• 8 years ago

Only if it uses proof of work.

gascan• 8 years ago

You might even say it will ultimately require at least 51% of worldwide electricity production, to ensure no actor (including nation-states) can suddenly on-line additional capacity to seize control.

And then if that's true, one might dream of a power plant arms race, where two competing nations build additional power plants as fast as possible to prevent the other from gaining enough electrical capacity to attack the network...

jsutton• 8 years ago

Not necessarily, non-hashing consensus seems to be where most blockchain projects are going. So these would require a stake of assets or similar, instead of wasting computing cycles.

sudomake4• 8 years ago

Yup, it anti-scales. If anything its scale resistant. Its a red queens race.

pilingual• 8 years ago

amluto• 8 years ago

Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

Why would you think an enormous amount of hashing power helps? Even with Bitcoin, the actual marginal cost of a 51% attack is quite low. The difficulty is the capital expense of actually connecting to a couple GW of power and finding enough rentable ASICs.

I think this is fundamental. In a proof-of-work scheme, if the mining rewards in whatever time frame is considered a full confirmation are less than the amount of gain available using a 51% attack, then a 51% attack is economical.

ASIC mining during boom time helps mitigate the issue a bit, since the ASICs are worth more if the currency isn’t devalued by 51% attacks, but even Bitcoin will be vulnerable of older, less efficient ASICs start flooding the market, which seems inevitable if the price of BTC stagnates enough.

Jommi12• 8 years ago

You're looking at this as a static _binary_ model, while actually, the 51% attack is heavily dynamic. The profitability of the attack heavily depends on factors that are absolutely dynamic and not publicly available:

- The exchange/betting website not catching onto your scheme

- The volume of the coin being enough to mass sell it and not majorly affect the price

- How fast the community can act in unison against you

celticninja6• 8 years ago

it exists

https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...

mike-cardwell7• 8 years ago

That graph doesn't tell me how much it costs to launch a 50% attack. Maybe I'm just lazy, but I want a table with the name of the crypto currency in one column, and the cost in USD to launch an attack in another column.

bunderbunder• 8 years ago

So, that's an interesting pair of ideas, in that it gets me thinking that any Bitcoin-style cryptocurrency might ultimately be doomed by its own design.

Shooting from the hip:

They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen.

So then, I think that implies that the only other feature you'd need to throw into the mix to ensure a cryptocurrency is ultimately doomed is to make the rate at which new coin can be mined asymptotically approach zero. Such a feature would mean that, in the long term, miners' revenue would ultimately be dominated by transaction fees, which, this being a supremely commodity service, market forces will presumably tend to keep relatively low. That would, in turn, limit the number of miners the economy can support, which would serve to limit the cost of mounting a 51% attack.

Meanwhile, what with a money supply that can't grow being inherently deflationary, the benefit of mounting such an attack would be constantly growing, for as long as said cryptocurrency remains in use.

drexlspivey5• 8 years ago

They've go this 51% vulnerability that is well known and hypothetically cannot be truly closed. Instead, we rely on the idea that mounting such an attack would be "too expensive". But at the same time, the cost/benefit of mounting such an attack is fairly easy to estimate using public data - all you really need to know is the cost to get to 51% and stay there for a given amount of time, which you can infer by monitoring mining activity, and the current price of the currency you'd want to attack. And you have to assume that whenever the cost of mounting such an attack dips below the benefit, such a thing _will_ happen.

Or, to turn this around, if X is the amount of money needed to sustain a 51% attack for 1 block, then you have to wait for 1 confirmation for every X amount of coins received.

ajross• 8 years ago

all you really need to know is the cost to get to 51% and stay there for a given amount of time

That's actually, if anything, underestimating the likelihood of a 51% attack. It seems that the more likely path to that situation is collusion between segments of the existing mining community. For such a cartel, the "cost" is zero, it's just a matter of trust.

acoma• 8 years ago

Decred appears to have solved the PoW 51% attack via a hybrid PoW/PoS consensus mechanism. It's practically unfeasable to attack at this point.

nemo1618• 8 years ago

On the other hand, there will be people who have a vested interest in preventing such attacks. If you own a lot of BTC, a successful attack can drastically lower the value of your assets, so it makes sense to deploy some of that capital to secure the network. And of course this goes even more so for business in the crypto space that rely on BTC remaining secure.

One example of this sort of behavior is in mining. We tend to think of miners as being selfish to a fault, and to some degree, that's true. But sometimes miners have the opportunity to mine empty blocks (a form of attack), and refrain from doing so, because it would harm the ecosystem as a whole and jeopardize their long-term profitability.

swerveonem• 8 years ago

This point should be made more often. It also supports the ethereum and EOS use case, a general purpose computing blockchain and distributed vm, it allows smaller utility coins to be backed by the same size network as the eth token and ecosystem, something they would never do on their own. The token's security is proportional to it's network size. Fragmentation of the already small subset of people capable of running blockchain nodes that actually do run nodes is great for innovation but bad for network security and confidence.

madeofpalk• 8 years ago

there is http://arewedecentralizedyet.com

mike-cardwell7• 8 years ago

Whilst that's an interesting page, it lacks the most important part of my request: "and how much it would cost somebody to take over 50% of the network"

verbatim• 8 years ago

Crypto currencies are worthless unless they have an enormous amount of hashing power behind them.

I think this is only true if you assume that crypto-currencies must be based on proof-of-work algorithms.

What about proof of stake systems?

Arbalest2• 8 years ago

Someone has already asked that, and the response was, such systems are still theoretical without a working proof of concept.

davesque3• 8 years ago

And the freakout cycle begins anew.

Havoc• 8 years ago

Obtaining this much hashpower is incredibly expensive

Is it? Presumably you only need to maintain it for a short amount of time. Sounds like something one could smash with google cloud preemptible GPUs or similar. Especially since such an attacker is presumably not above using a stolen CC or three.

49bc3• 8 years ago

Also they only need to hold 51% for as long as they can complete the double-spend attack.

celticninja6• 8 years ago

The article says they reversed some transactions up to 22 blocks later, which is 220 minutes, or 3 hours 40 minutes. So they would only need 51% for that time, but they didn't just add 51% of hashing power or that would be noticeable on the charts. From the looks of it [0] the hashrate has been falling slowly since BTG was created, so the miner may have just become the one with 51% by virtue of keeping mining with the same setup and then watching others stop mining, increasing his share of the network with no extra effort on their behalf. I would assume this miner also realises that BTG is dead/dying and is trying to extract as much as possible from it before they move their equipment to a new chain. If this attack method proves sufficiently profitable perhaps the miner will look at dying chains he can easily overpower instead of trying to mine a more profitable chain with a higher hash rate.

[0] https://bitinfocharts.com/comparison/bitcoin%20gold-hashrate...

barbegal• 8 years ago

Under normal free market assumptions, the cost of double spending is simply the expected reward of each block multiplied by the number of blocks that need to be mined. For bitcoin, where the reward for finding a block is currently ~$100,000, that means you should be able to double spend by mining 6 blocks at a cost of less than a million dollars.

The question is: are bitcoin miners subject to the usual free market assumptions? If someone offered you double the market rate to hire a bitcoin miner for an hour would you accept that offer or not?

rwcarlsen2• 8 years ago

The math doesn't work that way because honest miners amortize the capital cost of their specialized equipment over long periods of time. An attacker undermines the network's value and so must operate on shorter timescales. The capital costs of an attack could perhaps be partially recovered via resale, but getting order ~50% of the existing network's specialized hardware might prove prohibitively difficult even given sufficient capital.

[edit] And renting existing miners' equipment would be difficult because you would have to: figure out who they are, convince them to point their equipment to your pool, run your own dark pool servers to handle data from tons of miners, run infrastructure to make payouts to these miners, hope that exchanges don't have reorg procedures that prevent you from accomplishing your double spend, hope your chain reorg doesn't panic the market for long enough for you to double spend exchange to another coin that won't be tanking (due to the reorg).

Taek7• 8 years ago

As a miner, you are likely not going to accept because your entire revenue stream comes from the cryptocurrency being stable. If someone uses your hashrate to launch an attack, it's a direct threat to your future revenue especially if the attack discredits the security of the token you mine.

In this case though, Bitcoin Gold shares a hashing algorithm (Equihash) with many other blockchains. It is possible that some Zcash mining farm decided to attack Bitcoin Gold because they felt the revenue from attacking Bitcoin Gold was greater than the potential damage to their income, which is primarily Zcash based.

I'm just grasping at straws here, but generally speaking it's a bad idea to share hashing algorithms with another cryptocurrency, especially if that cryptocurrency is substantially more valuable (in terms of monthly block reward) than your own.

And, all GPU-mined coins are essentially sharing one algorithm, because the hardware can jump between them easily. So all GPU based coins share this vulnerability, where the tiny GPU mined coins could easily be attacked or wiped out by a large Ethereum farm at any point.

mrep4• 8 years ago

Totally, i even predicted this would happen 5 months ago (Not the crash yet though): https://news.ycombinator.com/item?id=15836819

Taek7• 8 years ago

Well, under the standard assumptions of blockchains like Bitcoin, yes it's incredibly expensive to obtain enough hashing power to do a 51% attack. There's a lot of nuance to it though.

In this case, Bitcoin Gold chose to have an "ASIC Resistant" algorithm, Equihash, and likely was only protected by GPUs mining the network. Bitmain has recently released an ASIC for Equihash that is substantially cheaper and more energy efficient than using GPUs, meaning that some pool which was able to buy a large number of the ASICs would have had a pretty easy time gaining enough hashrate to launch a 51% attack.

This is one of the big risks of attempting ASIC resistance. In the event that someone produces an ASIC, your coin is a complete sitting duck.

celticninja6• 8 years ago

but hashrate on BTG has been falling consistently since inception, it doesnt look like someone invested in a load of ASIC devices to perform this attack, more like they kept the same operation and watched its % grow as other miners left the chain for a more profitable coin.

powera• 8 years ago

If Bitcoin Gold weren't worthless before, it is now.

If it weren't so difficult and risky to sell this, it would be worth almost nothing already.

gruez6• 8 years ago

only down 10-20%

CryoLogic• 8 years ago

Hence why Iota is still using their coordinator.

gruez6• 8 years ago

centralization does solve a lot of issues, but at that point you might as well go with a postgres instance.

jhpriestley2• 8 years ago

When Bitcoin was running up to $20,000, I tried to analyze the system and come to a personal conclusion about its equilibrium value, because I didn't want to miss out if it really was the currency of the future.

I ended up not investing, because of the possibility of a double-spend attack. I think that cryptocurrency enthusiasts are seriously underestimating the importance of double-spending attacks to the economics of bitcoin and other cryptocurrencies.

A few points that convinced me not to put my money into this system:

If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack. There is no equilibrium point for transaction fees where this attack becomes uneconomical. The only defense is that the market for hash capacity is imperfect.

The market for hash capacity is going to become more efficient over time. ASIC miners will be commoditized, so that hardware investment becomes a much smaller factor in hash cost versus energy. This might be even worse during a bitcoin downturn, because there could be a glut of ASIC miners.

Miners will coordinate with market prices, turning off capacity when the price dips (for example, because someone is underbidding to create a 51% attack). If mining becomes more decentralized, it will be harder for miners to act in their common interest (fending off 51% attacks) and against their immediate interest (selling their hashrate to the highest bidder, or taking it off the market during an underbidding attack).

High transaction volume is not necessarily any help - the more transaction volume, the higher the cost of the attack, but the greater the rewards. The semi-anonymous nature of bitcoin means that one could easily flood the network with double-spend transactions. Attacking a huge network like bitcoin would be an audacious and expensive act, but there are certainly organizations with the resources to do it, e.g. intelligence agencies, organized crime. The massive rewards to such an attack also offset fixed costs such as writing and testing the software to carry out the attack.

tlarkworthy• 8 years ago

I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards. This makes sense, but only for the leading crypto coin. As we see here today, you can 51% attack smaller coins, which should imply an increase in the value of Bitcoin from consolidation.

tehsauce• 8 years ago

The spooky thing that this made me realize, is that if anyone did find a vulnerability in bitcoin (or any cryptocurrency) is that they would have a greater incentive to only slowly leech off the system, because they will be able to siphon out much more over time than if everyone panics over security. The weapon is no good unless it's secret.

zitterbewegung• 8 years ago

On certain exchanges you can short USD to cryptocurrency pairing.

cocoablazing• 8 years ago

You can profit from undermining the market. Futures volumes may currently be too low to find enough liquidity to use them for financing a major attack but this could change when BB’s start selling them in earnest to clients.

EGreg2• 8 years ago

1. Short bitcoin cash

2. Rent 51% and mine a fork in secret for a week

3. Wreak havoc

4. Collect money

gbhn• 8 years ago

My conclusion is that since this is true, the real thing maintaining the system is mutual cooperation of sufficient mining interest. When you look at the theoretical division of hashpower in btc, it looks too stable over generations of hardware. Any non-colluding ecosystem should have centralized. I conclude btc is a collusion system.

So why the pow? Is this stabilizing the actors somehow? It seems like an explicitly managed network would be no less centralized, way more efficient, and way more user friendly.

diogenescynic• 8 years ago

So you’re saying this is good for Bitcoin?

bb883• 8 years ago

I think the argument is that by doing a 51% attack you undermine the market value so you never get the rewards.

Only if you make it public. A 51% attack works at a poker table too, but only if the marks don't know the game is rigged.

A successful double spend makes it public, as well as announcing your intentions to get to 51%. If you're quiet and can pull off a successful 51%, you can create the double spend before anyone knows.

cslarson• 8 years ago

The value of bitcoin gold doesn't seem to have gone down in correlation with this attack.

drexlspivey5• 8 years ago

What a lot of people in the thread seem to be missing is that when you receive a huge payment you can require a higher amount of confirmations to accept it. High enough that it would make the 51% attack unprofitable.

onecooldev245• 8 years ago

you can split the payment to multiple small amounts.

cdetrio3• 8 years ago

Requiring more confirmations decreases the probability that a transaction will be reverted, under the assumption that an attacker has < 49% of the hashpower. If you attempt an attack with 49%, then you have a fair chance of mining, say, 6 blocks before the rest of the network. If you get unlucky then you sacrifice those rewards. But if you mine with 51% then your attack chain is (probabilistically) guaranteed to eventually become the longest chain, so there won't be any loss of revenue.

Taek7• 8 years ago

In the bitcoin system, miners make literally billions of dollars a year protecting the network. Any successful attack on the bitcoin network is going to massively erode confidence, reduce the price, reduce the usage, and therefore reduce the value of all that single-purpose, bitcoin-only hardware.

Large miners don't want to see Bitcoin get attacked because it destroys their income and de-values their incredibly expensive hardware. This is also why miners won't just let you borrow their hashrate for a while - it's a big issue if you use that hashrate to undermine their cash cow.

onecooldev245• 8 years ago

Top miners can short twice as many BTC futures to create one last profitable destruction.

chemmail• 8 years ago

Logical and sound arguments. However you underestimate human greed, human stupidity. Not everyone is operating on a Nash Equilibrium.

snarf21• 8 years ago

I think one of the other issues is that each transaction that they are double spending can be worth so much. If each transaction was maxed out at say $100, the incentive to double spend the transaction becomes smaller. Obviously that changes a lot about the costs of mining and transactions, just saying the bigger a single transaction or value in a single address, the larger the likelihood of an attack. We see the same things with cash, they only run the "counterfeit" pen on $20 or larger.

Just wondering if there is some kind of crypto currency where the transactions had a max of some kind. Would the difficulty be able to be much smaller and blocks every minute (since there would be so many more to transact)? This isn't well formed, just off the top.....

bondi• 8 years ago

This would probably lead to a huge increase in transactions, and PoW mining as of now will not to be able to process tranactions fast enough and the coin ends up clogged and unusable.

onecooldev245• 8 years ago

can you explain this in better words: "then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack."

bo10243• 8 years ago

I think what jhpriestly is saying is: As the market gets efficient, the price of renting mining capacity will approach the profits earned from transaction fees. So renting mining capacity will almost pay for itself, i.e. is almost free. But then you might as well rent a lot of it, like 51%, because it's allowing you to attack the chain almost for free.

bo10243• 8 years ago

Those are some really great and interesting points. However, I think there is a resource you didn't mention that combats such attacks: time. If I'm a vendor, e.g. I pay cash for bitcoin, then I can tune the amount of time the transaction is held in limbo or escrow based on the vulnerability of the network.

For instance, I can decide not to finalize the transaction until I see a chain with 12 new blocks added after the transaction block. So an attacker has to control 51% for 2 hours to successfully scam me. Or I can make it 24 blocks (4 hours), or whatever.

Not sure this can mitigate the attacks and market forces you discuss, but it might. I see Bitcoin moving toward an intermediary system where you have a "Bitcoin balance" with a "Bitcoin bank" that allows you to make immediate transactions and takes on the risk and time delay of settling these transactions on the blockchain over the course of the next day or two.

thaumasiotes3• 8 years ago

I see Bitcoin moving toward an intermediary system where you have a "Bitcoin balance" with a "Bitcoin bank" that allows you to make immediate transactions and takes on the risk and time delay of settling these transactions on the blockchain over the course of the next day or two.

How would this system differ from an ordinary bank in the system we have now?

biztos• 8 years ago

I'm a bit ignorant about cryptocurrency, but doesn't "I pay cash for bitcoin" sort of prove the parent's point that it's not "the currency of the future?"

ryanlol• 8 years ago

Attacking a huge network like bitcoin would be an audacious and expensive act, but there are certainly organizations with the resources to do it, e.g. intelligence agencies, organized

How do you propose they would go about doing this? Would they jam up the whole worlds chip production to source the ASICs at above market rates? How could this be profitable?

Perhaps by taking over existing mining operations, but then you’d need to somehow perform the attack before you’re detected.

rjkennedy98• 8 years ago

The numbers I've seen quoted for a double spend attach on Bitcoin Cash (assuming guaranteed block space) are that it would cost about 50K to double spend on a 0-conf transaction. So really, you can confidently accept 0-conf for <1K reasonably. More that that you can accept 1-conf or more which can take a minute or two. BTC rejects 0-conf transactions, but they are already in use around the world and are successful as far as I know.

Retric• 8 years ago

Except you profit from mined blocks. In theory you should be able do do a 51% attack for a profit even without double spending as you capture high value transactions over a longer timespan than normal. Aka in 10 ten blocks you get the same number of high value transactions as would normally occur over 20 blocks. Where you would end up with the same 10 blocks without a 51% attack but someone else would also mine 10 blocks and capture some of those high value transaction fees.

garmaine• 8 years ago

It costs nothing to double-spend a 0-conf transaction.

IncRnd5• 8 years ago

it would cost about 50K to double spend on a 0-conf transaction

That makes no sense. If there are no confirmations, there is no cost, because nothing happened. This comment is a 0-conf transaction on BTC...

split_tender• 8 years ago

What do you mean, “underbidding”, e.g. “underbidding attack”? I don’t understand this term in the context of your hypotheses which assumes a perfectly efficient market for hashpower

jhpriestley2• 8 years ago

Suppose that it takes $50 of energy to find a hash at current difficulty. Transaction fees are at $50 (in BTC). I can offer miners $51 for their hash power, but they might be suspicious. So the other thing I can do is confirm transactions for $49 in fees, which I'm calling underbidding. This will drive miners out of the market.

DINKDINK• 8 years ago

This attacked occurred on BTG a clone of Bitcoin, appropriating the name “Bitcoin” Gold.

It has nothing to do with Bitcoin.

DennisP3• 8 years ago

Interesting points. A defense against this type of attack is to use at least the hybrid proof-of-stake design that Ethereum is rolling out in about three months; blocks are proposed by proof of work, but proof of stake periodically adds a layer of "economic finality." Here's a paper: https://arxiv.org/abs/1710.09437

IncRnd5• 8 years ago

Just a cautionary note - you are describing the future in the present tense.

cdetrio3• 8 years ago

51% attacks on the block proposal mechanism could prevent the PoS commitments from ever becoming finalized (i.e. violate liveness), though.

dustingetz• 8 years ago

2nd and 3rd gen blockchain tech is not vulnerable to double-spend attack, i believe. Only the legacy chains (Bitcoin, Litecoin etc) are

djsumdog2• 8 years ago

Wouldn't this level of energy consumption be noticeable and stand out? What about the sheer number of ASIC units?

Right now what would minimum amount of power would be necessary? How many homes/neighborhood worth? How many Amazon data centers?

branchless2• 8 years ago

Here's my reason for not "investing" (it's no investing, it's speculation):

* bitcoin is not mandated as the sole accepted currency for settling tax in any sovereign state, therefore it can go to zero

sobani2• 8 years ago

It will never go to absolute zero as long as there are still people who at the very least see it as a joke. "Remember when BTC was $20000? I just bought 50000 of them, I would have been a billionair! Haha!"

Also tell people in Venezuela how their Bolivar is not going to zero, because they have to pay their taxes with it.

JumpCrisscross6• 8 years ago

there are certainly organizations with the resources to do it, e.g. intelligence agencies, organized crime

Nation states. Don't forget the large number of sanctioned regimes who would (a) have the resources to execute such an attack and (b) find great profit in doing so.

duxup5• 8 years ago

Plenty of legit and rouge nations (or departments within them) who would find that tempting I think. Currency politics and all aside that is a tempting way to make money.

flashmob• 8 years ago

If you wait long enough, say, for 144 confirmations (or 24 hours, whichever is greater) then a double spend may as well be the least of your worries, for bitcoin, or any of the top mined crypto-currencies.

These double-spend attacks are only successful if the receiving party doesn't wait long enough.

Also, could't find any sources from exchanges if they were actually successful? The article didn't mention which exchanges.

Quote:

"Blockchain data indicates that the attacker successfully reversed transactions as far back as 22 blocks, leading developers to advise raising confirmation requirements to 50 blocks."

So as long as exchanges wait 50 blocks before crediting, they should be all right.

EGreg2• 8 years ago

By the way doesn’t your argument also destroy anarcho capitalist utopia scenarios?

Someone could rent the local courts for a week, pillage everyone, and leave.

Or just come with a larger army.

hudon• 8 years ago

There is another--less talked about--way to double-spend: developers can cause forks and double-spend during the confusion.

In 2013, the network forked unexpectedly [0] and the Bitcoin network had 2 chains for about 4 hours. During those 4 hours, it is entirely possible that people sent BTC to exchanges they knew were going to be on the chain that ended up being orphaned.

A conniving team of centralized developers can take this a step further and discover or intentionally plant a consensus bug that causes such a fork and because developers ultimately tell everyone which chain contains the "fix" (in 2013, they commanded that the minority chain was the right one), the developers know which chain will be orphaned and thus which exchange they can exploit.

[0] https://freedom-to-tinker.com/2015/07/28/analyzing-the-2013-...

facetube2• 8 years ago

One of the many practical vulnerabilities.

hvidgaard4• 8 years ago

If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack. There is no equilibrium point for transaction fees where this attack becomes uneconomical. The only defense is that the market for hash capacity is imperfect.

At this point in time the current hashrate of the bitcoin network is 32.500 PH/s, up from 5.000 PH/s a year ago and 1.400 PH/s two years ago. If you rent 51% of the network it's going to be rather obvious that something is happening, that will however not prevent an attack. Let us assume that you can rent capacity because the miners are greedy, what price would you have to pay? Let's assume that you can buy from miners that want to exit the mining business, so they do not care about deprecating the value of their hardware nor the bitcoin value itself.

So the assumptions are that 51% of the available capacity don't care if bitcoin tank and burn as long as they profit enough, and you're able to buy that. A 0.43% difficulty increase daily (average over last 2 years), bitcoin price of 7.600$, a 4MW powerdraw, and electricity prices of $0.08/KWh

Miners controlling 51% would profit north of $1.000.000.000 yearly, and if they just want to be compensated for that one year, you have to pay $1.000.000.000 to rent 51%. That is a lot of money, and at $20.000 high it would be tripple that value.

However, why would 51% of the capacity suddenly exit? Rather they want to be compensated for multiple years of profit, lets say 5 years and it's not unreasonable to expect bitcoin to reach $70.000 in that time. So we're looking at a $50.000.000.000 cost to coordinate the attack. That's expensive, and with that kind of money there are other ways to make them multiply. Who would pay that to ensure destruction of the thing we know as Bitcoin? After all, the success means it's likely that another *coin takes over, where you cannot 51% as easily.

nopinsight2• 8 years ago

It is far from clear that Bitcoin will likely ever reach $70,000. That implies an approx market cap of $1,200,000,000,000 or more. Would Bitcoin ever be useful enough or generate more value than Google or several Big Energy companies combined to justify and sustain that valuation?

teekert• 8 years ago

If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack. There is no equilibrium point for transaction fees where this attack becomes uneconomical. The only defense is that the market for hash capacity is imperfect.

You're killing your goose with the golden eggs. That is, if a currencies remains in use.

antocv• 8 years ago

Not all cryptocurrencies are secured by hashpower or "mining", have you considered those?

Examples like Delegated Proof-of-Stake or "eusocial oligarchy like consensus" systems like Byteball?

viach2• 8 years ago

You have used technical analysis for making an investment decision. Scientific method, skeptical approach, great. And the assumption is "the tech is broken, the price will fall because of it, won't buy".

But, if we take on step further and continue our experiment, lets compare the actual facts with the assumption.

And what we see? Two cryptocurrencies (Bitcoin Gold and Verge) which were successfully attacked this week, didn't lose in market cap.

How comes? What conclusion should we take from this assumption/fact, if continue being scientific? Do we need a new assumption?

bobbrown• 8 years ago

In the long term the market behaves rational. It might take some time, but - if he is right - odds are on his side.

A mid-term (3-7 years) of irrational behaviour in a market in not unusual. Some will benefit from it.

tobiaswk2• 8 years ago

Great points. The thing is though that a double spend would harm both the attacker and all others on the network. It would weaken the trust. It is a double edged sword. You would have to do the double spend without anyone noticing and then liquidate your earnings as fast as possible. With more combined hashing power this would become very hard to do.

There are a lot of problems other than double spend with the Bitcoin. Transactions fees rise very quickly because of the block size limit of about 1MB. You can't really rely on 0-confirmation transactions. The saviour lightning network in my opinion is the wrong solution to the scaling problem. It changes fundamentally how bitcoins are exchanged and steers away from the original white paper by Satoshi. Not that this is wrong... it just becomes another project altogether.

CryptoPunk• 8 years ago

If the scenario you laid out actually pans out it would be very good for Bitcoin, because there is a lot of free energy in the world but it is highly distributed.

The dominant form of mining would be utility companies and individuals redirecting excess electricity generated from their renewable electric power generators, during off-peak hours and spikes in generation, to mining, and the constituents would be both numerous and globally distributed, owing to the wide geography areas across which renewable energy resources are found.

dmichulke• 8 years ago

If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates

"Renting 51%" (of any global market) and "at market rates" are mutually exclusive.

There is no equilibrium point for transaction fees where this attack becomes uneconomical.

The counterforce against doublespending is not transaction fee but cost of ownership of mining equipment.

Some other arguments against your conclusion:

- As mentioned nearby, for big transactions you want to wait longer than 6 confirmations.

- Also, as recipient you might want to distribute huge payments into smaller ones distributed over time.

- It's in the interest of mining capacity lenders to make sure you don't get 51% because it renders their equipment worthless in case you are successful.

- As you correctly stated, low prices will lead to lower hash rates (and higher prices to higher rates). This means actually that bitcoin will be more stable (it's harder to obtain 51%) if prices rise. There's an equilibrium on that side as well! That is, if double spending is what you're worried about.

wellboy2• 8 years ago

Your analysis isn't really a good one, since Proof of Work consensus through mining, isn't really used anymore by the new coins.

It seems you're too focused on a specific decentralized consensus solution, while there are already much better ones out there, e.g. Iota with a tangle, skycoin with a web of trust or Elastos that are immune to 51% attacks.

samolang• 8 years ago

If bitcoin becomes 'the currency of the future' then renting 51% of the capacity at market rates will be prohibitively expensive.

saalweachter• 8 years ago

When Bitcoin was hitting $20,000, which I never thought they'd do, I mostly concluded I'd missed any investment opportunity.

I plausibly could have invested a few hundred or thousand in Bitcoin was in the low hundreds, and if I hodl'd to the moon realized a hundredfold gain, which would have been nice.

But once you're at the moon, then what?

The new price predictions are things like "If Bitcoin replaces gold it could be worth $135,000/BTC.". Which is a lot, and a little far fetched, but also only 6x from the last peak.

I'm not interested in a risky investment which takes years to come to fruition and only yields 6x. It's too risk for a safe investment and too low-yield for a risky investment. Boat missed.

roymurdock• 8 years ago

It is often asserted (for example, in the Bitcoin white paper [22]) that a cartel can double-spend Bitcoins. In a strict sense, this is true: a cartel can spend a Bitcoin by paying it to a player Alice, receiving goods or services, and then shifting the consensus choice of history to a branch where that coin is instead paid to a different player Bob. However, we argue that double-spending by a cartel has a limited payoff. Bitcoins have value because people are willing to trade them for goods and services. If players were unwilling to accept Bitcoins for trade or unwilling to spend Bitcoins for fear of having their payments nullified, the value of Bitcoins would diminish significantly as players lost confidence in the system. Worse, because players are encouraged to generate a new identity for each transaction and because identities are not linked to any side information, players cannot easily determine whether a proffered payment is coming from the double-spending cartel or an honest user. Thus, a rational player should refuse to accept any payments when there is a significant threat of double-spending.

As a cartel must outmine the entire Bitcoin network and thus outspend the entire Bitcoin network for as long as it would remain a cartel, we believe it is very unlikely that a cartel could double-spend enough to recover the cost of the attack...

As described above, a 51% cartel attack is unlikely to generate enough reward within the Bitcoin economy to be worthwhile to the attacker. However, this does not rule out the possibility of a 51% attack that aims to destroy the Bitcoin economy in order to achieve utility outside the Bitcoin economy. We call this the Goldfinger attack after the character in film who tries to undermine U.S. currency by ruining its gold backing [15]...

In all of these cases, the attacker must achieve enough utility to justify the substantial cost of an attack. We agree with Becker et al. that it is unlikely that a protest movement could muster the resources to launch a successful attack. And at present it does not appear possible to acquire a short position on Bitcoins that is large enough to justify an attack. (2013)

The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries

Joshua A. Kroll, Ian C. Davey, and Edward W. Felten, Princeton University

https://www.econinfosec.org/archive/weis2013/papers/KrollDav...

Hupriene• 8 years ago

This seems to miss the point that the mining pays for itself in collected transaction fees. Double spend is just icing on the cake.

ojr• 8 years ago

blockchains are not immutable, the software that blockchain servers run can be updated to any chain with the most social consensus, if an attack was that bad it can be fixed with a few git pushes and pulls, the price might suffer but even that is not a guarantee, price movements have a greater influence than fundamental value in crypto

tacon• 8 years ago

If hash capacity were traded on a perfectly competitive market, then it would always make sense to rent 51% of the capacity at market rates, earn the transaction fees, and also perform a double-spending attack.

Lenin was right: "When it comes time to hang the capitalists, they will vie with each other for the rope contract."[0]

[0] https://quoteinvestigator.com/2018/02/22/rope/

russdpale• 8 years ago

I do believe you are vastly underestimating how difficult an attack on the bitcoin network would be. I seriously doubt anyone other than a handful of state level actors could pull it off, and even then I am not sure. The amount of energy we are talking is tremendous, and gets orders of magnitude larger the more blocks you go backwards in time. The XVG hack only went back 22 blocks, that is mathematically, and most certainly financially and perhaps even physically impossible with bitcoin. The amount of energy and money spent would never, ever make it worth it.

nemoniac• 8 years ago

Bitcoin Gold has a director of communications?

cies• 8 years ago

The team behind Cardano is proving their algorithms. I think they have even proven Bitcoin in the process, of proving their own algos.

I guess this is why one would like proofs, and proglangs that can (to some extend) incorporate the proofs/laws so your code is checked against them.

zeth___• 8 years ago

Purely hypothetical and mostly stupid: could double spending attacks be a way to overcome the issue of a limited supply of coins and the fact the total number of coins tends to zero as old coins are lost?

sanxiyn2• 8 years ago

No, because transactions are reversed in double spend attacks. It does not increase the supply.

213• 8 years ago

If you wanted you could "reclaim" coins which didn't move in 10 years let's say. Or you could just issue new coins. There is no need to go to such convoluted lengths.

rspeer3• 8 years ago

They already overcome the limited supply of coins by forking Bitcoin.

daveguy• 8 years ago

What do you want to bet the attacker shorted other crypto while they were at it?

ryanwaggoner• 8 years ago

If Bitcoin became the dominant currency of humanity, eventually we’d darken the galaxy by building Dyson shells in the ultimate energy arms race to prevent a 51% attack.

Joking. Mostly.

andirk• 8 years ago

A 51% attack, like you're saying, only needs more than half of the hashing power and that's it, and the whole thing is blown. But then again, all you need is 51% more weapons than your enemy and you can probably beat them too.

quickthrower22• 8 years ago

Having fun with your idea:

How do you adjust the algorithm for the communication time between opposite nodes. Let's say earth distance, 16 minutes at speed of light direct.

AlexCoventry3• 8 years ago

You don't; it simply takes 200,000 years to confirm your transaction is in the highest-work chain in the galaxy.

harryh• 8 years ago

How many millions? Is it time to update http://dayssinceacryptocurrencyexchangehaslostmorethan100mil... ?

Meh. I think I'm just gonna go ahead and add it. I haven't been paying close attention. I'm sure I've missed 1 or 2.

cutler2• 8 years ago

So much energy from the brightest minds of our age dedicated to getting something for nothing. I'm outa here.

CamelCaseName2• 8 years ago

They're not getting something for nothing.

They're taking money from others.

comboy• 8 years ago

Yeah, producing software is insane.

cutler2• 8 years ago

I was referring to those out to game the system, not the creators of the software. Then again, I have the same contempt for stock market traders, currency speculators and purveyors of financial "products", "instruments" or any other crazy term invented to make getting something for nothing sound respectable.

zaroth2• 8 years ago

So this would require an attacker to pay into the exchange with BTCg, have the deposit clear and approve for trading, trade it for another currency, and have that trade settle and be clear for withdrawal, and then process the withdrawal, all in under 4 hours. After which point the attacking miner surfaces a longer chain they had been keeping which doesn’t include the original BTCg deposit.

Alternatively, if the exchange isn’t smart enough to pay short-term withdrawals with inputs that link back to the recent deposit, an attacker could just deposit and then withdraw with no trade and the withdraw transaction is valid even if the deposit is double-spent.

An exchange that lets a trader deposit millions in one crypto-asset, exchange it for another, and clear a withdrawl in 4 hours... got what was coming to them? Where’s the KYC process for a million-dollar deposit?

There’s a reason new deposits in a brokerage account take a few days to settle / be cleared for trading. And again after selling before funds can be withdrawn. And that’s a currency where most transactions can be reversed!

It would be one thing to allow 10 block settlement for Bitcoin main-net. It’s another to allow it with a thinly mined alt-coin.

josu2• 8 years ago

Many people use exchanges for arbitrage. Exchanges benefit from arbitrage since they take a fee out of every trade and because they want their prices to be close to the international price of the asset.

This trade would look exactly the same as an arbitrage move.

zaroth2• 8 years ago

I still maintain that letting the assets come in and leave on a different blockchain within 24 hours is akin to a “RTFM” level mistake.

If exchanges are enticing arbitrage through insanely quick setttlement and clearance times on the order of 2 hours after closing a position, they are just playing with fire.

If there wasn’t an actual trade, just transfering in and out, not chaining the transactions is similarly RTFM.

If the facts are as I understand them, I think the exchange bears a significant portion of the blame.

It’s like the story a couple weeks ago where Deutche Bank accidentally approved a wire transfer for $35 billion dollars.

Jommi12• 8 years ago

You're hitting the nail on the head on this one. Couldn't have said it myself.

Majority of current exchanges are playing it absolutely fast-and dangerous. It's no surprise with new exchanges popping up like mushrooms.

I'd bet that the top exchanges didn't lose anything on this. I'd actually wager this didn't happen to an exchange, but some other type of site, like a BTG Betting site or something.

dantillberg• 8 years ago

Exchanges need to be built with the fluid nature of blockchain conflict resolution in mind.

You can estimate the cost of double-spend attacks on each chain at any time, calculate your potential exposure, track where the related funds are now in your system, and mitigate your exposure by delaying the outflow of funds that have outsize exposure to double-spend attack potential.

In the simple case, you might allow withdrawal of a single $10 deposit after 2 confirmations but enforce a long 1000-confirmation waiting period on a million-dollar deposit, in order to increase the cost of executing a double-spend against your exchange beyond the point which you estimate it becomes infeasible.

It's a little trickier in practice because someone could split their million-dollar deposit into 1000 thousand-dollar deposits from separate addresses into separate accounts. But you can still track your exposure in aggregate, and you should design a system to hold all impacted funds as long as is necessary to make a double-spend attack infeasible.

You can be upfront with your clients about what's happening and why their withdrawals are sometimes delayed: it would increase confidence in the safety of honest customers' deposits while discouraging thieves from targeting you.

gruez6• 8 years ago

But you can still track your exposure in aggregate, and you should design a system to hold all impacted funds as long as is necessary to make a double-spend attack infeasible.

also, you can monitor the value of transactions in the last few blocks. 500% spike in transaction value in the last 2 blocks? better add a few more blocks to the confirmation requirement, or require withholding on those deposits.

cat199• 8 years ago

Anyone well versed in this topic care to comment about how these attacks might/might not relate to the 'proof of work vs proof of stake' debate in the wider cryptocurrency world?

guiomie3• 8 years ago

How is the price not crashing? It's down 10%, which is pretty much like the rest of the market.

213• 8 years ago

Because shitcoin prices have no relation to any sort of reality. Some shitcoins are traded on exchanges even if no actual coin or code existed.

guiomie3• 8 years ago

They would exist as ERC20 tokens I believe...?

CamelCaseName2• 8 years ago

My understanding from a cursory read is that this happened a week ago, so perhaps the dump has already been priced in.

IkmoIkmo3• 8 years ago

Well for one, the price is down by 10% from last week. Whatever was priced in from those 'in the know' a week ago wasn't that big of a deal.

Secondly, the theoretical expectation was always that the value should go to 0. i.e., if parties can steal money whenever they want then the system is worthless.

Obviously there are parties who together form 100% of the mining power, same with 51% of the mining power. They need only come together and decide in order to steal. The only thing preventing this was a bit of game theory about how their coins and mining equipment would become worthless the moment they do this.

The fact that hasn't at all happened means they profited hard. And it means virtually any coin that has a set of investors with similar levels of disinterest is susceptible to these attacks.

My prediction is this: the first attack has little influence, even on bitcoin. It'll be cast aside as some mysterious accident, the theft won't be large and it'll be seen as insignificant, people will remain hopeful. When these attacks happen with some frequency, like once a month and at a large scale, then we'll see trust completely plummet and prices with it.

Nasrudith• 8 years ago

I can see two explanations. One being the irrationality driving the amount of demand for it being unchanged by mere facts until reality gets in their face in some way like a recession forcing enough to withdraw.

The second and more disturbing possibility being it is still good for money laundering cycles even if the actual suckers have cashed out. If money launders say maintain storefronts that give out digital goods of some sort the costs to themselves are minimal so they don't particularly care if someone gets a few megs downloaded for now invalid bitcoin.

hartator• 8 years ago

Stupid question: If an attack allows to successfully double spend, can you also triple spend or quadruple spend?

Cogito• 8 years ago

Well sort of.

Double spending is just convincing the network you've sent coins to multiple places, and then undoing all of the transactions that were 'paying' for something (in this case paying for credits at an exchange).

The actual details of what they were doing matters and I don't know them, but it's almost certainly simpler to chain double spends together, one after the other, than to try and do three or more transactions concurrently then reverse most of them.

This achieves the same thing as a triple or quadruple spend but only necessitates reversing one transaction at a time.

oceanman888• 8 years ago

I met the founder of Bitcoin Gold a few month before, I can not tell if there is any other reason he forked bitcoin than mere profit. He said he was going to fork ether as well. Given the speculative nature of the people involved in this network. could this be a inside job?

zerostar07• 8 years ago

maybe Bitcoin Diamond will prove harder

davesque3• 8 years ago

I see what you did there.

apo• 8 years ago

Oddly enough, one of the selling points of Bitcoin Gold (a hard fork of Bitcoin) was its use of Equihash instead of SHA-256. The idea was that a memory-hard proof-of-work function would inoculate Bitcoin Gold from miner centralization.

The problem with mining centralization is that sufficiently powerful miners can attack the network by rewriting blocks. This opens the door to double spending.

This was exactly the attack the article described.

It appears that Bitcoin Gold's decision to use Equihash led to this mess. The algorithm is used by several other coins. Hardware optimized for this algorithm can therefore be used with equal ease to mine on a network or attack it.

Bitcoin Cash may be headed for a similar fate. It retains SHA-256, but is a minority chain in terms of hash power. A powerful Bitcoin miner deciding to perform double spends on Bitcoin Cash would have everything needed to do repeat the Bitcoin Gold attack.

BTW, a similar attack recently occured on Verge:

https://blog.theabacus.io/the-verge-hack-explained-7942f63a3...

It's possible that any altcoin that becomes sufficiently valuable will suffer similar attacks to the ones that have now taken place on Verge and Bitcoin Gold.

hinkley3• 8 years ago

It's possible that any altcoin that becomes sufficiently valuable will suffer similar attacks to the ones that have now taken place on Verge and Bitcoin Gold.

The trust in these systems seems to be based on proving a negative.

The lack of an attack is neither a proof of robustness nor proof that one or more zero days aren’t already known. We can only “know” it’s safe when the temptation to use an exploit is far too high to resist.

I think there are a lot of people who imagine “an attack” as a ready-aim-fire affair. There’s a juicy target, someone concocts a plan and then uses it.

But as you illustrate, maybe there is already a plan and someone is waiting for the target to get juicy enough. Aim, ready, fire.

IkmoIkmo3• 8 years ago

The problem I think is that there are 25 cryptocurrencies bigger than it. Particularly with its form of mining, it's trivially easy for say a big player in the 10th largest currency to shift their mining power to a smaller one like Bitcoin Gold, overpowering everything else.

Normally the non-51% attack argument is that anyone who invests enough in 51% of the infrastructure and has sufficient coins to profit from double-spending, is very unlikely to do so because it would render the coins and mining equipment worthless or at least worth less than the investment had cost.

That'd be true for bitcoin, but not for a GPU-mined 26th largest cryptocurrency. You can completely destroy it, cash out and use your equipment elsewhere on coins in which people still have faith.

vasilipupkin• 8 years ago

so how exactly do you cash out? by exchanging double spent coins for btc or usd? but then can't exchanges just stop that from happening?

Jommi12• 8 years ago

You're forgetting that the lower you go with a cryptocurrency the less volume it has. This will have a major effect on your profits.

stale20025• 8 years ago

All of the major Bitcoin miners are very pro Bitcoin cash. They basically created Bitcoin cash. They would be more likely to attack Bitcoin Core, if anything.

I would also point out that Bitcoin cash is the 4th largest crypto currency in the world, by market cap. If IT is in danger.... Well I fear for everyone else even more.

nicky04• 8 years ago

Bitcoin Cash is only protected by the benevolence of the large miners. It is otherwise wide open to a 51% attack.

brokensegue• 8 years ago

the verge attack was different

Erlich_Bachman3• 8 years ago

All those arguments do make sense, but only if the underlying cryptocurrency is actually big enough. That it has enough hashpower (in whatever algorithm) - to be secure. Bitcoin Gold simply was too small.

simias2• 8 years ago

I guess the conclusion is that if you're attempting to create a new PoW cryptocurrency you better make sure to tweak your PoW algorithm enough to make sure that existing miners cannot easily convert their special purpose mining rigs to sink you for fun and/or profit.

JepZ• 8 years ago

Sounds like it isn't very wise to come up with new cryptocurrencies as long as the mining network is unregulated and the double spending problem isn't solved...

brudgers• 8 years ago

To me, this shows how Bitcoin type cryptocurrency mining incentives line up. For good actors, there is little to no incentive to seek 51% capacity whereas there is a lot of incentive for bad actors to seek it. As an economic activity, the logic of ruthless competition makes double spend capability the holy grail. Double spend is the sole reward for 51% capacity.

root_axis5• 8 years ago

I'm just waiting for the day when it's revealed that ~70% of miners on a top 5 cryptocurrency are compromised by a specialized worm or malware. We'll probably only find out after the double spending is discovered but this type of outcome seems almost inevitable. The people writing this type of software are definitely financially motivated, but I can easily imagine such a person throwing away millions of dollars in 0-days just to fulfill such a hackneyed cyberpunk cliche.

Also, we know that things like stuxnet exist. Imagine something even a fraction as crazy as that targeting mining nodes. It's going to happen eventually.

gruez6• 8 years ago

We'll probably only find out after the double spending is discovered but this type of outcome seems almost inevitable

attacks like this is harder to pull off than you think. miners constantly submit "shares" to the pool, which are then validated to credit them a share in the block reward[1]. depending on the difficulty threshold of the shares are, these could be submitted a few times a minute to every few minutes. if you hacked and gained control of the miners, sure you can redirect all the hashing power to you, but this will be detected quite quickly. with thousands of dollars on the line per minute, you can bet that everybody has monitoring in place to detect a dip in shares submission. also keep in mind that you have to keep this going for about 1 hour (for your initial transaction to confirm) without people noticing. moreover, the core problem stealing hash power to do a 50% attack is that block times will skyrocket on the main chain, which will let everybody (and not just the pool operator) know that something's up. plus after this attack, you can bet that exchanges will start requiring additional confirmations for large deposits, and instituting withholding times for cryptocurrency withdraws.

[1] I don't know whether large mining operators do this. Strictly speaking, they don't but I'd imagine they do this because it lets them know that their rigs are up and producing valid hashes (ie. not malfunctioning). It's almost certain that small mining operators use pools.

root_axis5• 8 years ago

You're right that there are a few canaries in the coal mine, but there are a lot of creative options if you have the ability to execute arbitrary code on a mining node botnet, assuredly some of which are yet to be discovered (as far as we know). Consider as well the many financial opportunities available to someone who may have an interest in sabotaging or disrupting some kind of mining activity, perhaps in subtle ways that are not usually noticed.

alistproducer2• 8 years ago

What's interesting to me is that the bit game theory that is supposed to make such an attack unprofitable seems not to be holding here. Supposedly the idea that the blockchain was insecure would devalue the coin to such a degree as to disincentive people from attempting these sorts of attacks. I see virtually no movement in the price of BTG and relatively little in XVG (also attacked this week). If anything, the fact that the chain's integrity can be compromised and nothing happens appears to undermine a core assumption of Nakamoto consensus.

gruez6• 8 years ago

Supposedly the idea that the blockchain was insecure would devalue the coin to such a degree as to disincentive people from attempting these sorts of attacks

The original claim was:

He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth

what satoshi didn't take into account, is the rise of "cloud mining" services and thousands of competing "alt-coins" using the same hashing algorithm.

granaldo• 8 years ago

How is the price https://www.coingecko.com/en/price_charts/bitcoin-gold/usd still good when this is all over the news?

bearjaws• 8 years ago

This isn't the first time terrible news has broke and somehow a coin remains valuable.

Remember when Bitcoin forked into Bitcoin Cash and somehow everyone just made up a new value for the coin?

It was like billions of dollars were created out of thin air, everyone started trading it and nobody batted an eye. Bitcoin even GAINED value.

There is no logic or sanity in the coin market.

carapace• 8 years ago

In August, a group split the chain to create a new form of Bitcoin that they called Bitcoin Cash. The two blockchains shared a transaction history up until the time of the split, giving anyone who held any number of Bitcoins until the so-called hard fork the equivalent number of Bitcoin Cash on the new fork. (A hard fork is a software change that runs the risk of splitting the blockchain into two, particularly if the community disagrees about it. If you follow Ethereum or cryptocurrency, you may have heard that Ethereum split into Ethereum and Ethereum Classic after a contentious hard fork.) However, many people who didn’t support Bitcoin Cash dumped their coins quickly, and, after initially spiking up to $900, the price has now deflated to about $300.

https://firenewsfeed.com/news/635991

Good God you're not kidding.

It's like a car accident, but there's this siren song urging you to join in because some of the people are thrown free holding chunks of gold.

It reminds me of a Jim Gaffigan joke. He's talking about trying to lose weight, and how hard it is when the fast food restaurant has a $2 for 2 burgers deal... "Well... I don't want to lose money on this... I'll take eighty."

On the one hand this whole cryptocurrency thing seems to be gone off the rails. On the other hand, I do feel kinda dumb for not owning any.

duxup5• 8 years ago

Is there a laymans explination for this attack?

"but the attacker was able to reverse transactions since they had majority control of the network."

I thought these crypto currencies didn't allow for reversing a transaction? Or is this "reversing" such as just deposit and then withdraw?

lawn• 8 years ago

I can try.

The purpose of mining is to solve a puzzle. In Bitcoin one solution is expected every 10 min on average. This can then be used store transactions on the blockchain in one block. To add to that block you need to solve a new puzzle and so on.

You can reverse transactions if you recalculate the puzzle solutions. This can take time but if you have more mining power than the rest of the network you can win this race. This is called a 51% attack.

So for example you deposit to an exchange and wait for that to confirm, in maybe 6 blocks. Meanwhile you create 7 blocks in secret yourself where you did not send to the exchange and release them to the world. The blockchain works by always considering the longest chain as the correct one, therefore overwriting or reversing the old transactions.

duxup5• 8 years ago

Thank you!

Jommi12• 8 years ago

It's not reversing per se, it's like the transaction never happened.

They send the money from their address to the exchange, the exchange credits that money.

Then they release their chain (that they have been building privately). This chain is taken as the consensus and accepted.

Why? Because it is the longest chain.

Why? Because it has had more than 50% of hashpower behind it, allowing it to add blocks faster than the current network.

Now the trick here is that because a single entity controls this new chain, they can just not include the transaction which happened between them and the exchange. So it a sense, it never happened. Yet, the exchange credited the account -- Thus the exchange account now has currency, and the original account has currency as well.

duxup5• 8 years ago

Thank you!

arconis987• 8 years ago

Someone please correct me, but here's my best explanation.

When you first connect to the Bitcoin network, how do you find out what the true blockchain is? You connect to other nodes and ask them. They may tell you anything. However, it's easy to verify whether a blockchain given in a response is valid. That is, it's easy to tell if a given blockchain is following all of the rules.

But what if you receive a few valid blockchains that are different from one another? Which one is the true blockchain for the world?

You simply choose the longest blockchain that you hear about.

Why the longest? It's the one that has had the most computing power focused on it. Anyone can compute a very small, self-serving, malicious blockchain of a few blocks. But to compute the longest blockchain in the world requires vast computing resources. The longest blockchain is supposed to be uncontrollable by any single party or network of colluders because it is supposed to be too hard to acquire the majority of the computing resources in the world.

Unfortunately, it looks like someone did just this and controlled >51% of all computing resources in the world dedicated to Bitcoin Gold. If you have enough resources, you can generate the longest blockchain in the world, add a self-serving transaction, get some goods or service in return, then recompute a new longest chain in the world where that transaction is no longer there. Everyone by default accepts the longest blockchain because it's supposed to be the most safe, but they are wrong.

duxup5• 8 years ago

Thank you!

I'm not well versed in the block chain tech but it is surprising that there is an inherent big ass monopoly type manipulation you can run ... inherent to the system.

That seems very much not what Bitcoin would "intend" and yet there it is, very available.

josephagoss• 8 years ago

Every POW coin should either switch to POS or if they are going to stick with POW they need to focus on a different algorithm and let ASIC development happen. The key to being a weaker chain is to encourage the community to build an ASIC just for your coin. I don't understand this push by many POW coins on sticking with commodity hardware, except for a few giants (zcash, eth, monero) you're going to get destroyed.

Dedicated ASIC only for your chain = good. Commodity hardware = bad.

pm24601• 8 years ago

<snark>Remind me again why cryptocurrency are a good idea</snark>

Seriously, the idea of smart contracts can truly be of value if attacks like this are no longer possible.

Animats• 8 years ago

This puzzles me. Although a miner with enough hash power can do a double spend, it's obvious from the blockchain that they did so. To bring this off, you have to have huge hash power and be anonymous. That limits the number of possible attackers.

Bitmain could do this to Bitcoin, but everybody knows where Bitmain is.

thedailymail2• 8 years ago

If all that is required to reverse transactions is 51% control, cannot the transactions that occurred during the double spend attack also be reversed by a 51% coalition once the attacker loses its majority?

IkmoIkmo3• 8 years ago

Sure but it doesn't solve anything. Remember that people do not trade token A for token A. You don't buy dollars with dollars. You use dollars to buy something else, like euros.

So you may reverse one token, but you won't be able to reverse the other.

i.e. suppose you have $100 and I have 100 tokens (e.g. bitcoin gold coins). You pay me $100 and I give you the coins. I now double-spend and sell the coins to someone else. You now have no coins and no money. I then double-spend that and give the coins to myself.

You could at some point fix this and get the coins back, technically. But you're not going to get your $100 back. Nor is the other person. And the other person never got his coins. So both of you are out of money, and only one has the token. Theft occurred.

Moreover, even if you somehow both had the coins, they ought to be worthless because the entire system is completely useless. If a system can be compromised like this, the tokens have no value. Just like a dollar bill has no value if it can be printed, or can magically be transferred to a thief at the click of a button.

I used dollars in this example, but the more likely avenue of attack is for the attacker to sell his bitcoin gold for other cryptocurrencies like bitcoin over and over. Like selling an expensive bicycle to a customer but keeping the key to the lock, stealing it at night and selling it to someone else, a dozen times in the span of a few hours.

All of this is a major issue without even getting into the political discussion on forming a coalition and deciding which transactions were fair, genuine, worthy to keep, and which weren't. That's virtually impossible, particularly when there's one set of double-triple-quadruple-spent coins out there to distribute with many people making equal claims that they were scammed.

thedailymail2• 8 years ago

Thanks for the clear and detailed explanation!

asasidh• 8 years ago

play stupid games (like listing shitcoins) win stupid prizes

AlexCoventry3• 8 years ago

I met the founder of Bitcoin Gold at a meetup which turned out to be a sales pitch for Bitconnect, funnily enough.

wellboy2• 8 years ago

Yes Bitcoin is vulnerable to a 51% attack right now and so are all other PoW coins.

That's why crypto is still in its infancy.

zygimantasdev• 8 years ago

I wonder if the idea for this attack came from Silicon Valley tv series

atlih• 8 years ago

Nope, this has been happening every year for the last 7 years. Great series though :)

kmbriedis• 8 years ago

That's why Proof-of-stake is the way to go, you will never see a major coinholder undermining the coin

tobiaswk2• 8 years ago

Well it was scamish to begin with. 100,000 coins were premined when it forked. With a lot less mining competition a double spend attack was just waiting to happen. It is possible to also do a double spend attack on Bitcoin and Bitcoin Cash. It's just not very feasible because you would need A LOT of hashing power. So this comes as no surprise to me at least.

zaekona• 8 years ago

Oh dear, it's not looking good for Bitcoin. Will Bitcoin recover, or should we let other crypto kings such as Verge take over already?

Lewton• 8 years ago

A few thoughts:

- It rubs me the wrong way to call it an "exploit" when 51% attacks are a core part of the way blockchains function.

- I'm surprised that the price for bitcoin gold isn't tanking. That's a sign that the crypto marketplace really isn't healthy right now, imo

- Conversely I'm surprised that this isn't causing a spike in coins that are more robust in regards to 51% attacks, like BTC and BURST (because they're both the majority coin in the realm of the resources they require)

B-Con• 8 years ago

Ordinarily, the blockchain would resolve this by including only the first transaction in the block, but the attacker was able to reverse transactions since they had majority control of the network.

Not a very precise explanation, just checking, what exactly does this mean?

I always thought the way a 51% double-spend attack worked was by broadcasting a transaction for human consumption (eg, I'll give you Y coins for Z dollars), then secretly mining your own blockchain for the N successive chains following it. After the humans have completed the human-level transactions after waiting the standard N successive blocks with no transaction conflicts, you release your own secret blockchain fork back into the public with data that contradicts the current popular one and instruct your network to ignore the competing publicly-acceptable chain. The new private one wins so long as it is equally as long as the public one which it should be because you have more compute power than the rest of the public.

Is that basically what happened here?

swift532• 8 years ago

You are correct. The longest chain is accepted as the correct one, so if you have 51% hashpower and secretly mine while maintaining majority hashpower the whole time, your chain will be longer and you can publish it at any time, and effectively rewrite recent history.

giancarlostoro• 8 years ago

Has there been other approaches at solving the double spend problem? I know ByteCoin (which is from scratch and uses 'CryptoNote' (or CryptoNight?) and respectively it's forks which includes Monero are designed a little different and I think they boast having solved the double spend problem too but I am not sure if they just do the same decisions as Bitcoin concerning updating the Blockchain?

Anyone care to weigh in on this?

brownbat3• 8 years ago

It's weird the reaction on cryptocurrency prices today has been so correlated, you'd expect a flight from smaller more vulnerable coins into the larger market caps.

Then again maybe everyone is just freaking out about the tether expansion...

bshastry• 8 years ago

how the heck did he acquire majority hash? Afaiu, this requires massive computational resources that no individual has access to

Marazan• 8 years ago

No one would ever actually do a double spend attack as it would be more profitable to mine the currency instead --Every cryptocurrency enthusiast ever.

throwawaylolx• 8 years ago

So BTG has a hash rate in the order of tens of M using the same hashing algorithm that is used on the ETH network, which has a hash rate in the order of hundreds of T? So a millionth (10e-6) of ETH hashrate could 51% BTG?

hwestiii• 8 years ago

Wait a minute. Isn't bitcoin supposed to be immune from this?

fixermark2• 8 years ago

That's going to be okay though, right? Given that it's clear fraud, the FDIC should be able to step in and make investors whole, right?

zby• 8 years ago

The strange thing about this is that there is no visible effect on the price of BTG. It is going down true - but most crypto go down now - and when you look at the chart you would not guess that there was such a dramatic event: https://cryptowat.ch/markets/bitfinex/btg/usd

branchless2• 8 years ago

Bolivar isn't goitto zero.

Bitcoin base value is comedy value .. ok.

sauravt• 8 years ago

Is there any way to prevent 51% attacks in bitcoin forks besides increasing confirmations?

whiteraven962• 8 years ago

Who is taking the money? What is it going to be spent on?

whiteraven962• 8 years ago

3 attacks in one week?! Who needs this kind of money?

wrycoder• 8 years ago

I hate to toss in a commonplace, but can’t anyone here play this game?

Bitcoin Gold Hit by Double Spend Attack, Exchanges Lose Millions

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