Digibyte, a cybersecurity and authentication-focussed cryptocurrency, is seemingly close to the infamous 51 percent attack. If executed, the altcoin would follow Bitcoin Gold as the second major blockchain attacked by majority mining in 2020.
Metrics raising questions
A post on r/cryptocurrency, the popular subreddit devoted to digital assets, on April 27 first brought attention to certain hashpower discrepancies on the Digibyte blockchain. The altcoin utilizes five mining algorithms for producing blocks and providing rewards to miners. But two of those, in particular, show massive hash rates as the post’s author tabulated:
Digibyte’s Skein and Qubit algorithms are attracting 587 Th/s and 391 Th/s hash rates respectively, accounting for over 40 percent of the blockchain’s mining inputs. The unusually massive and limited-to-two algorithms hash input indicates few groups could be behind the surge.
While the identity of the mining group/s behind the large input remains unknown, it opens floodgates for speculations about a possible 51 percent attack on Digibyte.
Theoretically, if the group/s were to rent hashpower via cloud-based mining Nicehash, they could execute a 51 percent attack on Digibyte at a cost under $3,000. Attackers could reverse and double any transaction at will, leading to a severe compromise in the blockchain and unlimited funds generated in $DGB.
Can Digibyte’s “multishield” avoid an attack?
In 2015, Digibyte’s developers stated the network is protected against nefarious attacks by their “MultiShield” difficulty adjustment. The program ensures a “fair 20 percent distributed between all five algorithms” and any “sudden influx” of hashpower is detected. However, Litecoin creator Charlie Lee criticized the reported protection in 2018:
Here's a quick analysis to show that DigiByte's 5-algo system isn't more secure than Litecoin. To match the whole DigiByte network, it costs about $27MM and $1k/hr to attack. But since global hashrate for each algo dominates DigiByte's, it can likely all be rented for <$5000/hr. pic.twitter.com/tRsaVlNTt7
— Charlie Lee [LTC⚡] (@SatoshiLite) May 31, 2018
In the absence of additional security measures, Lee indicated an entity could simply and cheaply take over all individual algorithms and cause a 51 percent attack. Mathematically, any Bitcoin mining group could attack Digibyte with minimal resources, and pocket up to $20,000 a day on block rewards at current prices.
Miners may have dumped several hundred thousand
An inspection of addresses on Digibtye’s explorer reveals a few entities have pocketed enormous amounts of $DGB in the past few weeks, as per address wallets here and here. At current trading prices, the mined $DGB works out to a cumulative $581,000 as per data on CryptoSlate.
However, the currency was worth well over $850,000 a few days ago, meaning a significant amount of mined DBG has been dumped on the retail market even as the broader crypto market rises. A single entity is controlling 8 percent of Digibyte’s Qubit algorithm and reaping $7 every few minutes at current prices.
The post Top-40 altcoin Digibyte rumored to be close to a 51 percent attack appeared first on CryptoSlate.