Cryptocurrency BOOMS Says Mike Novogratz

The cryptocurrency market blooming so vigorously in these current times, led to Mike Novogratz, a billionaire investor and former Goldman Sachs and Fortress trader, declaring that it was nearing the $20 trillion region at the Bloomberg Invest Summit in New York. Between many ICO projects under development, new cryptocurrencies being released, and crypto exchanges being hacked, a lot has changed in the cryptocurrency market this year.

Coinbase, a digital currency exchange headquartered in San Francisco, made its first real acquisition by buying Earn.com. Earn.com, a portal to make money by answering e-mails or completing other tasks, was bought for a little more than $100 million.

The famous 51% attack, which used to be more theoretical than actual, has hit at least five cryptocurrencies recently. The 51% attack refers an attack on a blockchain, usually on Bitcoins, by a group of miners who have control of over 50% of the network’s mining hash rate, or computing power. With that control, the miners, as per their wishes, can halt transaction on the blockchain, control them and can even reverse them.

Monacoin, Bitcoin Gold, Zencash, Verge and now, Litecoin cash have all suffered the 51% attacks on their blockchain. These are mostly smaller coins in the market. The 51% attack is easier on smaller coins because they don’t have much miners making the required 51% computational power easier to achieve. This attack is usually done on an exchanges which have millions in amounts of smaller coins.

The first to be attacked was Verge with $1.8 million swiped in hours. Then, Bitcoin Gold was plundered in an $18 million attack. Verge was again swiped with %1.7 million. Monacoin has also been believed to be hit. These attacks are possible and can be done on coins using proof-of-work as a consensus. After that, three successful attacks on Zencash led to attackers getting away with 21,000 Zen, equivalent to $500,000 at the time of writing.

Zencash’s co-creator has argued that the rise in the mining marketplaces has made buying or renting mining hardware easier and attackers can buy tons of mining power all at once. Maybe this is the reason why the theoretical 51% Attack is more frequent these days. These attacks are equivalent to huge bank heists with capital stolen worth over millions of dollars.

Bitcoin has a very big network and to gain 51% access to its network hash rate will require a lot of computational power. This power would cost a lot more than any other coins and that’s why only smaller coins have been targeted so far. So, all the smaller coins which uses proof-of-work consensus are at a constant risk of getting attacked.

The best way to keep safe from these attacks would be to accept older coins, or the coins that are buried by more blocks of transactions, called confirmations. Like, in the case of Bitcoin Gold, which only requires five confirmations, and the hacker can reserve it more easily. Because of this, Bitcoin and other larger coins are safer and less prone to these attacks.

The time has passed with quite a lot of developments in the cryptocurrency market. Bitcoin is still down to around $600, which is unusual. Ethereum is the new favorite among developers for ICO projects. The world is still unsure of what to think of cryptocurrencies. The debates are, thus, always on about whether the world’s opinions on cryptocurrencies will change or not.