In a bold and controversial move, two mining pools for Bitcoin Cash (BCH) recently launched a 51% attack on the blockchain. They intended to reverse the transactions made by an attacker.
Hard fork led to the attack
The 51% attack was launched by two mining pools- BTC.com and BTC.top to stop an unknown miner from taking coins from an unknown miner. During the May 15 hard fork of the blockchain, this miner gained access to these coins owing to the change in code. He took advantage of a bug, which was later patched, that made miners mine empty blocks for a short period of time.
A 51% attack is an event when one or more entities take control of over 51% of the total hash rate of the blockchain. It provides them unprecedented power and helps in executing several functions which are normally unavailable. In this case, the two mining pools tried to rewrite the transaction history of the network to disallow the attacker from getting any coins.
BTC.top led the attack
It is important to note that BTC.top alone controlled over 50% of the total hashing power of the Bitcoin Cash network at one point. It joined hands with BTC.com to take majority control of the blockchain and reverse block transactions. Data from Coin.Dance suggests that the two mining pool have a combined hashing power of 44%.
The move is controversial because it breaks the principle of “immutability” in blockchains. A Bitcoin Cash developer using the name Kiarahpromises wrote in a recent article that coordinating to revert transactions in a blockchain should be considered a 51% attack. The developer called it “the absolutely worst attack possible” and asked questions about the idea of decentralized and undesirable cash.
The attack event is causing a split in the Bitcoin Cash community about the legitimacy of such actions. According to Bitcoin podcast host Guy Swann, a significant number of coins were sent to an ‘anyone can spend’ address when Bitcoin Cash originally split from Bitcoin. It could have occurred because of transaction compatibility of sigs when BCH didn’t support SegWit.
The code change was removed during the May 15 hard fork of BCH after which these coins suddenly became spendable, to be sent to miners. An unknown miner took advantage of the situation to steal the coins. Therefore, BTC.top and BTC.com decided to reverse those transactions. Swann also noted that the two mining pools were quick to identify issues and removed the attacker’s transactions in favor of their own. The crypto community is now mulling over the centralization of Bitcoin Cash blockchain.