Bitcoin SV rocked by fifth 51% attack, serial culprit attempts double spends

Four previous 51% attacks took place between June 24 and July 9, says Bitcoin SV's association, carried out by a miner called 'Zulupool.'

Bitcoin Satoshi’s Vision (BSV) suffered a huge 51% attack on Tuesday, the blockchain’s fifth in three months.

The Bitcoin Association (a non-profit supporting BSV development) said in a statement it believes the culprit was also behind similar incidents in June and July.

Four previous 51% attacks took place between June 24 and July 9, says the Association, carried out by an entity using the pseudonym Zulupool.

On Twitter, the group advised BSV node operators to run a command to invalidate fraudulent versions of the blockchain during consensus to prevent the attacker double spending.

Coin Metrics’ Lucas Nuzzi tweeted that BSV miners were now simultaneously working on three different blockchains.

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

No further reorganization events have been witnessed, but there are still synchronization conflicts taking place on major mining pools. pic.twitter.com/aM6FoWOKke
— CoinMetrics.io (@coinmetrics) August 3, 2021

‘Max depth of 14 blocks’ means the attacker effectively invalidated transactions in BSV’s previous 14 blocks.

Small PoW chains like Bitcoin SV are prime targets

‘51% attacks’ are waged by malicious miners seeking to establish their own version of a Proof-of-Work blockchain by controlling more than half of its hashrate.

51% attackers:

create their own version of the blockchain (often re-organized to their benefit) before broadcasting it to the network,
activate enough rigs to mine blocks faster than anyone else (the longest chain wins),
prevent new transactions and trick crypto platforms (like exchanges) into letting them spend crypto twice (double spend).

Bitcoin is the largest distributed blockchain network, so 51% attacks are far less likely and require collusion at scale.

Smaller networks like BSV are more vulnerable as they don’t need as much computing power to dominate: Bitcoin boasts over 100 times BCH’s hashrate and 160 times BSV’s.

Hashrates of BCH and BSV almost don’t register when charted alongside BTC.

Indeed, BSV is a fork of Bitcoin Cash (BCH), which itself is a fork of Bitcoin.

Craig Wright, who claims to be Bitcoin creator Satoshi Nakamoto, led the network’s launch in 2018 to purportedly scale BCH by boosting its maximum block size from 32MB to “two gigamegs.”

On the other hand, Bitcoin’s block size limit (which effectively caps the number of transactions per block) is 1MB, although it can be stretched to 4MB with SegWit.

51% attackers double spend on exchanges

BSV’s extra large block size allows a ridiculous amount of data to be stored on BSV’s blockchain.

This does make way for on-chain video and image apps, but it’s difficult to say BSV has been totally worth it.

Bitcoin is up 1,350% since BCH forked in August 2017 and over 500% since BSV forked in November 2018. Meanwhile, BCH has roughly doubled, and BSV has risen less than 30%.

Often, miners work with these chains at a deficit.

Investors in Bitcoin SV and Bitcoin Cash might feel they should’ve picked Bitcoin instead.

Not to mention, the losses associated with BSV double spent on the few crypto exchanges that still list the cryptocurrency.

In late July, Caymans-headquartered exchange Bitmart sought a restraining order to stop “Chinese hackers” from depositing BSV — referring to those who’d plagued the blockchain with re-orgs in weeks prior.

Bitmart claimed 43 users had been defrauded when the 51% attacker deposited and sold double-spent BSV. The firm said it tracked fraudulent BSV to eight other exchanges, including Binance and Huobi.