Rental attacks mean that blockchains must evolve or die301.23

Blockchain technologies have a well-earned reputation for hacking and fraud, but the recent theft of more than twenty million dollars of second-tier cryptocurrencies like Bitcoin Gold, Verge, and ZenCash was a fundamental attack on the core mechanisms that allow cryptocurrencies to function. The way that most blockchains (including Bitcoin and Ethereum) function now is called Proof-of-Work; miners must solve hard computational problems to add new blocks of transactions to the chain and the majority (i.e., 51%) of the computational power can determine what transactions appear in the public ledger.

In May and June, these second-tier cryptocurrencies suffered from what is called a “51% attack”, where attackers rented more processing power than the honest participants of the network, enabling them to control the transaction register and engage in nefarious behavior. For instance, an attacker could steal from an exchange by sending a deposit of compromised cryptocurrency, cashing it out, and then striking the initial deposit from the public ledger.

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