Privacy coin Firo suffered a 51% attack on its blockchain network today. The unknown attacker reorganized more than 300 blocks on its blockchain during the course of the attack.
Major attack on Firo Blockchain network
The attack occurred in the early hours of Wednesday with Firo tweeting about it around 1.28 am UTC. According to the blockchain protocol, the attack was not because of a coding error in its protocol but due to the nature of the Proof of Works protocol.
As a reminder, 51% attacks generally concern blockchains that use Proof-of-work (PoW) consensus. They occur when an entity controls more than half of the hashrate of the network. This enables the entity to reorganize the chain and blocks to profit from them or censor transactions. This is why the occurrence of a 51% attack on Firo can be extremely problematic for the altcoin.
In the case of Firo, the attacker reorganized more than 300 blocks and this change was apparently noticed when users reported that previously confirmed transactions had become unconfirmed. Binance chief Changpeng Zhao revealed in a tweet that the attack had resulted in the reversal of confirmation of 306 blocks. Thus reducing the blockchain blocks history to January 18, 2020. This means that transactions that were performed in the past 48 hours were unrolled by the attacker.
At the time of publication, there is a fair amount of uncertainty regarding the extent of damage caused by the attacker. Firo team claims that the attack has stopped but has not projected the extent of economic cost to the protocol. However, the blockchain developers admitted that exchanges are likely to be at loss since the attacker had deposited funds that had been reversed due to the 51% attack. It is understood that leading exchange Binance and Indodax are the two affected.
51% occurs before major update to Firo blockchain
It is understood that the attack on the Firo blockchain occurred just before the deployment of a new feature called Chainlocks. Chainlock is a secondary validation layer that was expected to mitigate 51% attack. With Chainlocks activated, the attacker would have been required to control 50 of all Firo master nodes in addition to 51% of the mining hash rate to control the blockchain.
As expected the news of the 51% attack has affected the price of FIRO (FIRO). At the time of writing, the privacy coin is down 14% in the past 24 hours. It is not uncommon for hackers to target Proof-of-Work blockchains with low hash rates with Ethereum Classic and Grin suffering 51% attacks in 2020.