Bitcoin Cash (BCH) Price Resumes Climb After Upgrade Attack is Foiled

Bitcoin Cash (BCH) underwent a successful upgrade on May 15th, but only after fighting off a calculated attack by a malicious actor. The attacker exploited a block template creation bug and filled the BCH blockchain with 10 consecutive empty blocks.

The attack coincided with a possible plan to short the Bitcoin Cash price on Bitfinex, with 180,000 BCH being funded just as the attack got underway.

With the BCH price rising 8.98% in the hours following the successful completion of the upgrade, the attacker could now be nursing some heavy losses.

BCH Attackers Outsmarted

Cornell University professor and Bitcoin Cash supporter, Emin Gün Sirer, revealed the Bitcoin Cash attack on Twitter. Sirer tweeted:

“BCH came under attack today, due to an old bug in block template creation. Attack led to empty blocks for a short while, until patched, otherwise had little effect.”

Sirer said the attacker picked the day of the upgrade specifically to launch this attack, adding:

“Someone spent months sitting on this bug and chose to exploit it during a scheduled upgrade. It’s pretty juvenile, but also, a great reminder that this is a space with byzantine actors, and we must pay close attention to software correctness.”

The attacker filled the blockchain with oversized transactions, effectively blocking the Bitcoin Cash blockchain for those conducting real transactions.

An Electron Cash developer was on hand to clear those transactions from the mempool, and was even able to retrieve the hackers BCH from his spam transactions. Redditor u/NilacTheGrim told the BCH community:

“The attackers used p2sh addresses that had easily guessable scriptSigs (they lacked a signature altogether to redeem). I ended up liquidating about ~1.2BCH of their funds just now in 3k tx’s.”

No other BCH transactions were affected by this.

Betting on Bitcoin Cash Going Down

The sudden appearance of 180K BCH ($66 million at the time) being taken out on Bitfinex could be purely coincidental. However one sharp-eyed redditor spotted the funds being released just as the attack got under way, and it could be a sign that someone was betting on BCH crashing today.

Assuming that’s all from the same person or group, that means someone put up roughly $20 million (3.3x leverage) in the hope the BCH price would sink.

The performance of the BCH price in the hours after the attack would have left a hole in their pocket. BCH rose 8.98% after the upgrade was announced as complete. That carried the BCH coin price from $374.09 up to $407.07.

Bitcoin Cash Upgrades: Schnorr Signatures Activated

The Bitcoin Cash upgrade saw the addition of Schnorr signatures to the BCH blockchain. There’s a 4% difference in size between Schnorr sig transactions and the ECDSA signature transactions BCH currently uses, making for a subtly streamlined blockchain.

Schnorr signatures are a feature many blockchain platforms have been eyeing in recent times. Learn more at the Bitcoin.com website.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via Stockcharts.com and CoinMarketCap.

Author:
Greg Thomson is a freelance writer who contributes to leading cryptocurrency and blockchain publications like CCN, Hacked, and others.