Japanese Cryptocurrency Monacoin Affected By Self-Centered Mining Attack

Monacoin, a cryptocurrency created in Japan between May 13th and 15th experienced a network attack that resulted in an estimated $90,000 in damages.

The attack seems to have occurred by a self-centered mining attack, where one miner was able to mine a block on the blockchain but does not reveal the new block to other miners. If the anonymous miner is able to discover the second block before other miners find any new blocks, then the anonymous miner can successfully develop a branch in the chain that is not the chain everyone else is using.

According to the standards of most blockchains, the chain with higher blocks is seen by the mining network to be the right chain, as it has the most “proof of work.” Hence when the anonymous miners publicize their longer china, it cancels any and all of the blocks created by other miners during the time the secret chain was not made public.

A self-centered mining attack can be destructive and cancel blocks that become “orphaned” when self-centered miners publicize their chain on the network. It could also be that someone having a secret chain could benefit from the attack.

However, in this case, it looks like the attacker tried sending Monacoin to exchanges outside of the country such as Livecoin, to change them for other currencies prior to the disclosure of the secret chains. Presently, the identity of the miner is still uncertain had sufficient computing power to take more than 57 percent of the hashrate at some point to be able to carry out the attack.

It seems the attacker has been making efforts for some time now to take advantage of the way Monacoin tries to handle its challenges.