BSV Working with Exchanges to Restore Services After Malicious Attacks

By Alexander Joe

 

Bitcoin Association, the Switzerland-based global industry organization advancing the adoption of the BSV blockchain for enterprise and government, has issued a statement in the form of answers to the most frequently asked questions (FAQs) about the recent illegal attacks on the BSV network.

The Bitcoin Association FAQs follow a public statement on July 8 that outlined a zero tolerance approach for illegal attacks.

In response to the attacks, several exchanges – as a temporary measure – restricted withdrawal, deposit and trading functionalities – a matter which the Association has confirmed that it continues to work around the clock with exchanges to restore facilities as soon as possible. In fact, the first exchanges – including Gravity – have already started re-introducing service.

“Each exchange will make its own decisions about when and how to re-enable BSV services.  At this stage, we cannot provide exact timings for when BSV deposit, withdrawal or trading facilities will be active at your chosen exchange. Bitcoin Association and its representatives remain in contact with exchanges and will share any news and updates on this front, as and when it becomes available,” the Association said.

 Block Withholding or Reorganization Attack, Not a 51% Attack

The attacks occurred on June 24, and on July 1, 6 and 9. Because “block reorganizations are a feature of the Bitcoin system when they occur organically and are used to align participants and nodes on the network,” the first two attacks were not immediately detected as malicious in nature. There is no need to investigate block reorganizations as they occur normally on the network.

“This type of attack, known as a ‘block withholding’ attack, involves a malicious actor creating a chain of competing blocks—re-written to the benefit of the attacker, i.e., containing double spends—in parallel with the correct chain. These malicious blocks are created in secret then released all at once to orphan the correct blocks from honest nodes,” the Association explained in the FAQs.

Bitcoin Association and its development arm, the Bitcoin SV Infrastructure Team, immediately took reactive and preventive measures to mitigate the effects of the attacks.

“[These measures] include coordinating with miners and transaction processors on the Bitcoin SV network to implement both reactive and preventative measures—including fork detection tools that enable ecosystem participants and partners to move expeditiously in the face of attacks. Since these measures have been initiated, there have so far been no further attacks on the network,” The Association stated.

The Attacker

Although Bitcoin Association has not verified the real-world identity of the unknown miner responsible for the attacks, it has found out that it goes by the moniker “Zulupool.” And the Association has stated that it does not “believe that the malicious actor is the same ‘Zulupool’ that has long been associated with the Hathor miner of the same name.

This “Zulupool” impersonator is also most probably the same malicious actor that perpetrated the same attacks on the Bitcoin ABC (BCHA) chain last March. Aside from using the same handle, the BCHA attacks also had “similarities in methodologies and characteristics with the reorganization attacks on BSV.”

Actions being Taken

On top of being in constant communication with exchanges to restore BSV services, an extensive investigation is underway and Bitcoin Association is in the process of filing a criminal complaint. Further legal actions will also be taken as evidence is collected and verified.

BSV is continuing its operations, with the network back running as usual. The network is progressing due to massive scaling; and the Teranode project, which will be released before the end of the year, is also continuing as planned—enabling the network to complete over 50,000 transactions per second—a feat that breaks records within the cryptocurrency world.