Privacy-Focused Crypto Firo Suffers 51 Percent Attack

51 percent attack firo
51 percent attack firo

Over the years, 51 percent attacks have always reminded the crypto industry of the many dangers of Proof-of-Work (PoW) blockchain mechanisms. The latest asset to suffer this security flaw is privacy-focused cryptocurrency Firo.

306 Blocks Rolled Back

Anonymous cryptocurrency Firo formerly known as Zcoin, confirmed that it had suffered a 51 percent attack. In a tweet, the digital asset’s developers advised users not to make any Firo-based transactions for now and wait until the network returns to normal.

In blockchain parlance, a 51 percent attack occurs when a single entity controls the majority of a network’s hashrate. In such a scenario, the attacker can exclude or change the transaction order deliberately. They would also be able to reorganize transaction blocks on the blockchain and prevent transactions.  

In Firo’s case, the attack came to light when some users reported that some of their previously confirmed transactions were suddenly unconfirmed. Essentially, the attacker had reorganized the blockchain order.

Binance boss Changpeng Zhao explained that the blockchain reorganization process led to the rollback of about 306 blocks of transactions.

Details of the attack from the developers’ Telegram page also showed that the attacker had “orphaned” transactions that were confirmed from yesterday.  

As the developers explained, the hack wasn’t due to an error in the cryptocurrency’s underlying code. Peaking to industry news sources, Reuben Yap, a Firo project steward, explained that the developers regularly check to see the network’s hashrate distribution. So far, they hadn’t seen anything capable of pulling off an attack on that scale.

Instead, they pinned the attack on their inability to launch Chainlocks on the Firo mainnet. A Chainlock is a secondary validation mechanism that reportedly reduces the risk of a 51 percent attack. As Yap claimed, the installation of Chainlocks will require a network participant to control at least half of all master nodes on Firo – as well as the usual 51 percent of total hashrate dominance – to conduct the 51 percent attack successfully.

The developers confirmed that they had stopped the attack and were working on remediating the damage on the blockchain. The attack’s financial implications are still unknown.

Attackers Love ETC

The complexity in executing them makes 51 percent attacks one of the rarest security flaws that could befall blockchain networks. However, some cryptocurrencies haven’t been so lucky at getting clear of attackers.

In August 2020, Ethereum Classic, an offshoot of the original Ethereum blockchain, suffered three separate 51 percent attacks. The third attack alone caused the reorganization of over 7,000 blocks, causing exchanges like OKEx to threaten to delist the asset if the security threats continued.

Ethereum Classic has a significant history with 51 percent attacks. It suffered a similar problem in January 2019, when a single entity got 60 percent of the blockchain’s computing power. The hacker eventually stole 85,000 ETC tokens, worth about $500,000 at the time.

As expected, the hacker rolled back the transactions, gaining the tokens they spent back.

Remember, all trading carries risk. Past performance is no guarantee of future results.

Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.