Crypto Coin Bitcoin SV Appears to Have Faced a ‘51% Attack’

(Bloomberg) --

Cryptocurrency Bitcoin SV is under a blockchain attack that appears to have inflicted at least some damage to the network, according to a firm that analyzes system data.

The “51% attack” -- an invasion on a blockchain by miners who gain control of more than half a network’s computing power -- could enable the intruders to prevent new transactions from gaining confirmations, thus giving them the power to stop payments between some or all users or double-spend coins.

A 51% attack was initially identified on the BSV network on Tuesday, Coin Metrics said on Twitter, with the market-intelligence group backed by firms such as Goldman Sachs Group Inc. and Fidelity Investments later adding that “no further reorganization events have been witnessed, but there are still synchronization conflicts taking place on major mining pools.”

Bitcoin SV, a spinoff based on the original “Satoshi Vision” of the world’s best-known cryptocurrency, endured previous attacks in June and July. BSV is the 44th-biggest cryptocurrency according to CoinGecko.com with a market value of about $2.6 billion. It was created as a so-called hard fork off Bitcoin Cash in November 2018, which itself involved a radical protocol change from Bitcoin in 2017.

“There is so much hatred” in the competitive world involving Bitcoin, Bitcoin Cash and Bitcoin SV, said Konstantin Richter, chief executive officer and founder of Blockdaemon, a blockchain infrastructure provider. “It’s a simple ploy to get BSV kicked off exchanges in my eyes.”

Amid the apparent attack, BSV was down about 4% in the 24 hours to 1 p.m. Hong Kong time to $135.47, according to CoinGecko pricing. It’s off more than 70% from its mid-April highs.

“In the immediate term, the attack has seemingly had a somewhat-negligible impact on its current price action,” Adam James, senior editor at cryptocurrency exchange OKEx Insights, said in an email to Bloomberg. “Faith in the proverbial third-place Bitcoin will likely be reduced further following the incident -- which may negatively affect its long-term price prospects.”

The Bitcoin Association, which supports Bitcoin SV, took to Twitter to instruct node operators how to respond.

“Bitcoin Association is aware of an active re-organisation attack on the BSV network,” it said in a post, adding node operators should mark fraudulent chains as “invalid” to lock out attackers.

BSV was created “to restore the original Satoshi protocol, keep it stable and enable it to massively scale,” according to BitcoinSV.com.

©2021 Bloomberg L.P.