- BSV prices go down by 4% amid major network hijack of the Bitcoin SV blockchain
- Mining hash power manipulated in the 14-block reorganization attack
- BSV/USD exchange rate broke out of bear flag formation on August 2
JAIPUR (Coinchapter.com) — The Bitcoin SV (BSV) blockchain has fallen prey to a significant network takeover attack (aka 51% attack). BSV/USD prices tanked by 5% in response to the fiasco.
Hackers reportedly managed to reorganize fourteen blocks on BSV’s parent chain at 11.45 AM on Tuesday. Unfortunately, the online miscreants also caused the network’s mining power to rise exponentially, resulting in chaos and confusion amongst mining pools.
Lucas Nuzzi, Network Data Product Manager at Coin Metrics, who was among the first to report the incident, also found mining happening simultaneously on three versions of the Bitcoin SV blockchain.
“Over a dozen blocks are being reorganized & up to 3 versions of the chain being mined simultaneously across pools,”Lucas announced on Twitter.
While confusion across BSV mining pools was rampant, chain reorganization didn’t proceed beyond 14 blocks.
Bitcoin Association, an organization harboring “business” ties with the Bitcoin SV development team, called for node operators to denounce the spurious blockchain spawned from the attack. “This will immediately return your node to the chain supported by honest miners and lock the attacker’s chain out,” the association noted.
What Happens in a 51% Attack?
Public blockchains operate with ‘honest nodes’ harboring more than 51% of the network’s computational power. All these nodes contribute to keeping the correct version of the chain alive.
They do so by keeping themselves updated with the latest version of the blockchain containing all the latest transactional records.
But sometimes, ‘dishonest miners or nodes’ jack up their hash power to rewrite the original records and create a new blockchain. This way, they make the cryptocurrency already spent available to them ‘again,’ thereby compromising the underlying consensus protocol.
Bitcoin SV (BSV) Prices Tanked
The BSV/USD exchange rate suffered losses to the tune of 5% due to the 51% attack. After breaking out of a bear flag formation, Bitcoin SV’s native cryptocurrency was already trading with a downtrend since Monday’s morning session.
Accelerated drawdowns led BSV to register almost 11% losses from $150 on August 2 to $133.7 today. At 65, RSI readings were also flashing overbought signs and have now declined down to 41.67. the MACD indicator, too, has entered a bearish phase.
The BSV/USD exchange rate has dipped well below the 20-day exponential moving average (EMA) wave. And also below the 38.2% Fibonacci retracement level ($134.632). The Craig Wright created Bitcoin fork could accumulate further losses if selloffs lead BSV down to the 50% Fibonacci retracement level ($129.937).