Sun. Apr 11th, 2021
Double-Spending, Free TON

Double spending is a well-known problem of all cryptocurrencies. It is impossible to spend cash twice, but it is quite possible to simultaneously promise the same amount to several sellers trading on credit. Information can be copied. If this is possible with cryptocurrency, it will significantly reduce the credibility of such a payment system.

Double Spending in Blockchain With Proof-of-Work Consensus

The very structure of such a blockchain prevents data from being taken from it and reused. Any block and any transaction in a block are timestamped and what has already been counted as a change in the balance of transactions in the cryptocurrency network should not be counted again.

can exist at a time when a new block begins to form in the network: some miners did not receive information about the spent funds and consider these funds as available. In this case, there may be a situation where some miners will form a chain of blocks with one transaction for the same amount of tokens, and some with another. This will build two block chains. In reality, the correct chain will have more confirmations from the miners (who will verify correctly) and the false chain will be discarded, the correct transactions from it will be collected into the next block of the blockchain, and the transaction that includes already spent funds will be discarded. 

The goal of the attackers is through the control of the miners to maintain a sufficiently long chain of blocks containing a false transaction using already spent funds, for example, in order to have time to withdraw funds from the blockchain through an exchanger. However, to do this, the attacker must have a lot of miners under control. When an attacker controls more than half of the miners’ power, he can double-spend his funds at any time. This situation is called a 51% attack.

Double Spending and 51% attack are closely linked. To protect against a 51% attack, it is necessary to ensure that mining power is distributed among several pools, without being concentrated in one place.

Cases of Double Spending

Double Spending, Free TON, blockchain

In 2013, there was a strong split of the Bitcoin blockchain and while the miners could not decide on the correct block chain, the sites of cryptocurrency exchanges and exchangers did not work. But this split did not lead to Double Spending.

So has there been Double Spending on the Bitcoin network? There is one fact of such spending, but for a negligible amount (0.00034801 BTC — $ 3 at the time of the transaction), moreover, it was not associated with malicious intent. 

A 51% attack on the network of the little-known Pigeon Coin cryptocurrency, based on the Bitcoin Core 0.14.0 code containing the vulnerability, was successful. The attacker managed to generate 235 million PGN worth 15 thousand dollars.

There are also examples of attacks involving larger amounts. In May 2018, there was a 51% attack on the Bitcoin Gold cryptocurrency network. It brought the attackers the equivalent of $ 17.5 million stolen from the Bittrex, Binance, Bitinka, Bithumb and Bitfinex cryptocurrency exchanges. Such cases have significantly undermined the confidence of the owners of the Bitcoin Gold cryptocurrency.

Later, in early 2020, in the Bitcoin Gold network, attackers managed to re-perform a double 51% attack and make a profit of 1900 and 5267 BTG (about $ 84,000 at the time of the hack). To do this, they rented mining facilities on NiceHash, which cost $ 1,700 for each hack (the estimated cost of such an attack on Bitcoin would exceed $ 700,000).

After an unsuccessful hard fork (software update), a vulnerability occured on the Bitcoin Cash (BCH) network that allowed an unknown hacker to double spend 3392 BCH ($ 1.35 million).

The 51% attack was a strong blow to the Ethereum Classis network as well. The attacker managed to embezzle $ 5.6 million in ETC cryptocurrency equivalence. The principle of hacking was the same as in the case of the attack on the Bitcoin Gold network (hackers rented mining facilities on NiceHash). The rent cost them $ 192,000.

Using a 51% attack, the Krypton and Shift, Monacoin, Zencash, Verge, Aurum Coin and Litecoin Cash cryptocurrency networks were hacked. The prey of the attackers was from several tens of thousands of dollars to several million dollars in the equivalent of cryptocurrencies. The Vertcoin network was attacked in this way several dozen times in a week, since the cost of an attack via NiceHash, a little more than $ 100 per hour, was also available for novice hackers.

Ivan Kotelnikov: “Double Spending in Free TON is impossible”

Double Spending in Free TON

We found out from Ivan Kotelnikov, one of the active members of Dev Ex SubGovernance Free TON and an information security specialist by education, whether Double Spending in Free TON is possible? 

— No, there can be no forks in Free TON, this follows from the network architecture itself. If a transaction that implements Double Spending is written to a block, such a block will most likely not be signed by the validator, but even if this happens (a malicious validator), after the error is detected by the Fisherman, the erroneous block will be corrected and these changes will be recorded by correcting all network blocks that referred to the erroneous block.

Therefore, there can be no alternative block chains in the Free TON network, which excludes Double Spending. 51% attack (total power) in Proof-Of-Stake networks is impossible, since blocks are formed by validators. Free TON uses the BFT consensus to form blocks by validators, which works consistently if more than 2/3 of the validators correctly perform their functions. If there are more than 1/3 of “malicious” validators, the network will be stopped and such an attack will lose economic meaning within the network, as the network will lose its value.