In the past month or so, several blockchain networks suffered a 51% attack on their networks. These include networks such as Bitcoin Gold, Verge, and MonaCoin, among others. During the weekend, ZenCash became the latest victim of the 51% attack, which resulted in the loss of 19,900 ZEN worth approximately $550,000 in double spend trades.
The ZenCash network was the target of a 51% attack on 2 June at approximately 10:43 pm EDT. The ZenCash team immediately executed mitigation procedures to significantly increase the difficulty of future attacks on the network. Read more here https://t.co/Eh9eabz9vV
— ZenCashOfficial [No Free ETH] (@zencashofficial) June 3, 2018
According to a statement released by ZenCash, the attack took place at about 2:45 am UTC. The team was alerted about the malicious activities by a mining pool operator, and immediately executed security measures to resist the attack. The ZenCash team evaluated the hash power distribution and increased the number of confirmations by nodes in the network that were needed for a transaction to be successful. This is when the attacker’s luck runs out. At the same time, ZenCash advised all exchanges which have listed ZenCash to increase the confirmation times.
A 51% attack happens when an attacker manages to gain control of more than 50% of the hash power in the Proof-of-work system. This way, the attacker gains the majority control of the blockchain, thereby exploiting the blockchain through double spending. Double spending means spending the same fund twice, by selling them, then reorganizing the blockchain to deposit the fund in a particular wallet. The victim in this scenario is usually the exchange.
When the attack was carried out, the hash rate for the ZenCash network was 58 MSol/s (the equivalent of TH/s in the Bitcoin network). Investigations reveal that the attack was a double spend and further investigations will be conducted with all affected exchanges. The ZenCash team believes that the attacker was a private mining network that was big enough or had access to rental hash power that could conduct an attack of such magnitude.
ZenCash is a platform designed to provide secure communications and private economic activity based on blockchain technology. ZenCash has so far identified the suspected mining pool address. The hacker caused multiple reorganizations of the blockchain, with the longest reorganization resulting in reverting 38 blocks and making a double spend of 6,600 and 13,000 ZEN. The price of the ZenCash network attack was around $7,000 per hour.
Following the news of the attack, the value of ZEN fell by 4.78% to $28.48. The trading volumes were also affected because of a number of exchanges that have listed ZenCash increase the confirmation length. More than 64% of ZEN volumes are traded on Binance, but smaller exchanges were more vulnerable to the attack. At the moment, Binance is holding a ZEN trading competition with a 10,000 ZEN reward pool.
To this day, the hacker behind this attacks is yet to be identified. However, one interesting fact is that ZenCash and Bitcoin Gold, a previous victim, both run the Equihash algorithm. In the attack on Bitcoin Gold, the attackers made away with a massive $18 million in a double-spend attack that affected exchanges that had listed Bitcoin Gold. This fact has made many to speculate that the attacks are carried out by the same hacker.