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BSV User Films Himself Supposedly Double Spending his Crypto on a 0-conf Transaction

Bitcoin Cash SV (BSV), the altcoin born after the fork of Bitcoin Cash, seems not to be as secure as Craig Wright says as some hours ago a user reportedly was able to double spend his coins in a “0-conf transaction”.

The double spend is an attack in which a user manages to spend their cryptocurrencies repeatedly taking advantage of vulnerabilities inherent to the nature of consensus algorithms. Generally, the most feasible causes that can facilitate a double spend are a 51% attack or a race attack.

So far there are no records of an attack of this nature to the Bitcoin ( BTC ) network, something that is even more difficult when it is practically a habit that merchants wait for several confirmations or rely on payment processors.

However, given the nature of 0-conf transactions, an attack of this type, although difficult, is also possible and a user with the alias of “reizu”  uploaded a video on Vimeo filming an effective double spend of his BSV tokens:

Reizu Explains What He Did (And How Double Spent His BSV)

The user also wrote about this vulnerability on a blog posted on Honest.cash explaining how he carried out the attack (for educational purposes).

According to his explanation, the root cause of BSV being so vulnerable is because of its centralization. Taking advantage of this situation, he sent multiple expenses through the different nodes which allowed him to prove that the danger is genuine:

Then I had an idea. What if I send each node an unique transaction? Instead of a double-spending, it would be a kind of four-hundred-and-fifty-spending, one for each node of the BSV network … By keeping a record of which node each transaction was sent to (txid), then I could see which transaction is the one that was mined in the next block. That way it would help me for identify the mining nodes.

Indeed, after a few mined blocks I discovered that the transactions that were being mined were those that were sent almost always to the same nodes. I also confirmed what we already knew, that Bitcoin SV mining is very centralized. Specifically:

  • 34% of the hashrate is only 1 node.
  • 59% of the hashrate are 2 nodes.
  • 68% of the hashrate are 3 nodes.
  • 75% of the hashrate are 4 nodes.

Therefore, if there are 450 nodes in the BSV network; transaction T1 could be sent to 446 nodes, transaction T2 sent to 4 nodes, and the odds of transaction T2 being mined would be 75%.

Reizu pointed out that from his point of view, to avoid the possibility of this attack, “nodes must communicate with each other when they receive a double-spending transaction (sending a proof), ignoring it silently does not make sense”. He explained that other solutions are simply less convenient.

After this news broke, some Twitter users wrote to Craig Wright asking for an explanation. Weight simply denied the rumors without providing further logical or technical back to his words

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Bitcoin Cash (BCH) Temporarily Overtakes BSV After Gemini Listing

Gemini Adds Bitcoin Cash Support

Starting today, users of the U.S.-regulated, Winklevoss Twins-headed Gemini platform will be able to deposit Bitcoin Cash (BCH), the chain backed by the ABC client. This development comes via an official statement from the New York-based company, issued through Medium on Thursday morning.

Per the announcement, trading for BCH will commence on Monday, December 10th, while custodial services for the popular altcoin have already started. BCH is now the fifth crypto asset listed on Gemini, now an exchange even more exclusive than Coinbase when it comes to listings. BCH joins Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and ZCash (ZEC), the latter of which was recently added to Coinbase in a surprising turn of events.

BCH trading on Gemini was first announced in May, after the startup received approval from the New York Department of Financial Services (NYDFS), but the Winklevoss Twins were mandated to delay the asset’s launch due to the fork.

Closing off its announcement on the matter, Gemini maintained that the addition of BCH is in-line with the startup’s underlying mission. It was explained by Eric Winer, the platform’s Vice President of Engineering:

“We are excited to add this cryptocurrency to the Gemini platform — the world’s most regulated cryptocurrency exchange and custodian. We are proud to provide our customers with a safe, secure, and compliant method to buy, sell, and store cryptocurrency as we build the future of money.”

Abra Reactivates BCH Trading

Just days prior to Gemini’s surprising announcement, American crypto platform Abra, often touted as a Coinbase and Circle competitor, also made a BCH-related announcement, but in a different context.

Through an official company blog post, the Mountain View-based startup first noted that prior to the November 14th hard fork, it suspended its in-house BCH-centric services. But starting last Monday, deposit, withdrawal, and trading support for the controversial asset resumed. The fintech company then issued a comment on why it chose to back ABC, the client of choice of Roger Ver, Bitcoin.com, and Bitmain, as such a decision was likely deemed disputable.

Abra, headed by crypto advocate Bill Barhydt, noted that it is “becoming clear” that ABC is the dominant chain, presumably due to the block lead and higher PoW statistics the fork had at press time. Yet, the popular crypto-centric platform added that it may “consider supporting” BSV, ABC’s primary competitor chain, in the future, dependent on how two chains play off each other moving into the future.

BCH Overtakes BSV After Multi-Week Brawl

For those who aren’t in the loop, amid this week’s market tumult, BSV, backed by the notorious Craig “Faketoshi” Wright and Calvin Ayre, saw a monumental rally this week, moving up the crypto standings faster than many could utter “HODL.”

In a matter of days, if not hours, BSV began to approach the market capitalization of BCH, with many crypto-centric commentators taking to Twitter to express their disbelief, as many thought the civil war between the two factions ended.

As BTC tanked, falling under $3,500, BCH followed close behind the world’s first cryptocurrency. Although many expected for BSV to follow suit, it didn’t, with the forked asset immediately surging, passing the market capitalization of BCH.

However, with Gemini’s stamp of approval, BCH has started to outperform BSV for the first time in days, recently surpassing its competitor in terms of market capitalization.

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Bitcoin by Design; Falling Difficulty and Hashrate Makes Mining Easier

With all the doom and gloom being published about Bitcoin at the moment it is often hard to overlook how it has been designed. When prices plummet, hashrate and mining difficulty follow suit as the blockchain operates exactly as it has been designed.

The mainstream merchants of doom are almost rubbing their grubby hands together with glee as Bitcoin falls to new yearly lows and drops over 80% from its all-time high. Stories of mining farms closing down due to non-profitability have added fuel to the fire. Even established finance websites such as Marketwatch are running headlines of despair and crypto worthlessness.

According to that opinion piece, Bitcoin is getting close to the point where it becomes worthless claiming that a fall in price to below the cost to mine will render the digital currency redundant. However, with the falling price comes a decline in difficulty as highlighted by charts on Blockchain.info.

The 15% fall in difficulty shows the ease at which miners can find a new block. Hashrate, which has fallen by the same amount, shows the amount of computing power required to make the calculations.

At the time of writing the hashrate has fallen to just below 32 million TH/s.

As powerful mining machines such as Bitmain’s Antminer S9 shut down due to power consumption costs there is less computing power in the mining pool which will reduce the difficulty.

Some observers have noted that this has been the biggest fall in Bitcoin history.

This fall has come a year after the biggest rise in Bitcoin history so things are ironing themselves out in the ecosystem and the blockchain is behaving as it was designed to. The fall makes it more profitable to mine Bitcoin than some of the other cryptocurrencies. This may open the doors to new miners and reduce the power of the conglomerates such as Bitmain.

As previously reported by ETW Bitcoin miners are now switching to alternatives such as BCH or BSV. The recent ‘hash war’ between the rival groups and attempts to entice BTC miners over to their camp no doubt had some influence over the recent market rout which dropped prices by almost 40%.

Things will eventually balance themselves out in the Bitcoin network, it will find a bottom, probably stay there for quite a while then, according to many industry observers, rally again sometime around the middle of next year.

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