Crypto is said to be a great innovation mainly because of blockchain tech. However, hackers are looking for different creative ways on how they can get their share of cryptocurrencies.
One of the most common problems in cryptocurrencies today is hacking. In fact, the most recent concern by crypto investors is the 51% attack being done against some of the most popular cryptos in the market today. 51% attack is usually done on cryptocurrencies that make use of proof of work. This includes cryptos such as Bitcoin, Ethereum, Bitcoin Cash, Monero, Dash, and Litecoin. And this attack has launched a dialogue within the blockchain community.
People are starting to ask just how secure the networks are. It was discovered thanks to some research that $2 billion can be hacked with a capital of as low as $1.5 million.
Crypto51.app was launched that tracks down the costs of performing the attacks on proof-of-work digital currencies. According to its calculations, theoretically, Litecoin network attack could cost just around $61,000.
Charlie Lee was forced to respond to this. He said that the threat to Litecoin network is relatively low as he highlighted the strong distribution of pools, not to mention the high capital cost of a potential attack, plus the increasing hashrate within the Litecoin network.
One of the things that made 51% attacks quite popular is all due to the rentable hashing power. Platforms such as NiceHash paved way to this trend allowing attackers to execute their plans by hiring hashing power. An hour of attack could already be enough to confirm around six blocks or even more.
One of the recent attacks was done on Bitcoin Gold. It has resulted in the execution of double spends that generated more than $18 million. The Bitcoin Gold team clarified that there is no risk to its small users. However, there is a serious risk that is involved in platforms that accept large payments.
According to the team: “A party like an Exchange may accept large deposits automatically, allow the user to trade into a different coin quickly, and then withdraw automatically … Until now, some Exchanges were operating with less than five confirmations required. We have been urging higher limits to prevent such an attack, and urging manual review of large deposits of BTG before clearing the funds for trading.”
Verge has also fallen victim to this cyber-attack. It was the third incident that involved the cryptocurrency. In fact, the two previous attacks were able to capture $1 million and $1.8 million respectively.
How Does The Attack Take Place?
The attack takes place when the single entity gains more than 51% of the hashrate in the network. This allows the attack to prevent valid transactions and even reverse the already confirmed transactions. There is also a probability that a single coin can be spent twice.
Should there be any concern on the part of crypto investors? Over the years, there are plenty of attacks being made in the crypto industry. In fact, even crypto exchanges are being hacked. Is Litecoin truly safe this time around?