- Privacy coin Firo is the latest proof-of-work coin to suffer a 51% attack.
- The team has said that this is “not a coding error but a nature of PoW”, advising the users to pause all transactions.
- The attack preceded the deployment of Chainlocks, a technology that would have prevented such a development.
Firo, the privacy-oriented cryptocurrency, has suffered a 51% attack, which resulted in the blockchain having to be significantly reorganized.
“We are under 51% attack at the moment. We recommend not to make transactions during this time until the network returns to a normal state,” the team revealed earlier on Wednesday.
Zcoin rebranded to Firo in November 2020 while continuing to utilize the same blockchain. Last week, an update called Lelantus was activated on Firo’s mainnet, bringing zero-knowledge proofs as part of the “on-by-default” privacy feature that ensures transactions sent by official Firo wallets stay hidden.
According to Changpeng Zhao, the CEO of Binance, the blockchain reorg was 306 blocks deep. “51% attack, 306 blocks rolled back, to 2021-01-18 17:24:20(UTC). Another messy situations,” said Zhao.
Before the attack, the price of Firo soared to a five-month high of $7.10, only to crash by more than 15% afterwards. Currently, the coin is trading around $4.95.
The team is yet to share further details, though they’ve said that this is “not a coding error but a nature of PoW.”
Details of the attack shared on the project’s Telegram group showed the attacker orphaned the previously confirmed transactions, and the blocks mined by legitimate pools were catching up on those abandoned transactions.
According to the Firo team, the attack would be near to impossible had they already deployed Chainlocks, a secondary validation layer aimed at mitigating this type of attacks.
However, in a thread detailing the specifics of a reorg attack, Dr. Emin Gün Sirer, who is leading the Avalanche protocol project, insists that Chainlocks is only a “temporary” fix and can’t be “considered safe or sound.”
51% attacks are not anything new to cryptocurrencies relying on the proof-of-work consensus mechanism. As reported by Decrypt, Ethereum Classic went through several of such incidents last year.
Perhaps, Satoshi was right.