Privacy-focused Cryptocurrency Suffers 51% Attack: 300 Blocks Were Rolled Back

Blockchain technology is a digitized encryption method to confirm transactions.

Using distributed digital ledgers, it increases the visibility and transparency of transactions made throughout a supply chain and between members of a network. What's more, the data is continuously reconciled.

Boasting of an iron-clad defense system that supposedly couldn't be hacked, blockchain also requires transactions that are going to be recorded to pass proper verification before being added. This makes false operations even easier to detect.

And because it is decentralized, blockchain has no central administrator, meaning that management and authorization is spread across the network.

This way, there should be no single point of failure present.

But still, just like any other forms of technology, blockchain does have some weaknesses.

Read: How Blockchain Can, And Cannot Prevent Fraud By Using Distributed Ledger Technology

Firo is a privacy-focused cryptocurrency.

Formerly known as Zcoin, it fell for the 51% attack.

Announcing it on Twitter, Firo revealed that the protocol had come under a 51% attack and advised all holders to pause all of their transactions until the network returns to a normal state.

The attack was found when users reported that previously confirmed transactions had become unconfirmed. After the developers investigated, it was apparent that some hackers have managed to make a blockchain reorganization attack to its network.

The malicious actors managed to rollback 306 blocks.

Details of the attack shared by team members on the project’s Telegram group showed the attacked “orphaned” confirmed transactions from the previous day.

At publishing time, the Firo team said that the attack has stopped.

[block:block=87]

Firo project steward and co-founder Reuben Yap said that:

“Exchanges are the ones at a loss as the attacker had deposited funds which have now been reversed because of the 51% attack. We are still working with exchanges to resolve the matter. From what we know at the moment both Binance and Indodax were affected.”

Firo stated that the attack was not due to a coding error.

“We frequently assess to see what kind of hash rate is easily rentable on MTP and it never approached something that would have been able to pull off an attack on this scale,” Yap added.

According to the team, the attack was possible because the project was yet to deploy Chainlocks on Firo's main network. A Chainlock is a secondary validation layer that reportedly mitigates a 51% attack.

Without Chainlocks in place, the attackers didn't have to control at least half of all Firo's master nodes, in addition to the usual 51% mining hash rate dominance.