The 51% Attack Epidemic: Why Altcoins Are Losing Millions to Network Hijackers

The Emerging Narrative

Something unprecedented is unfolding across the cryptocurrency landscape in June 2018. At least five blockchain networks — monacoin, bitcoin gold, zencash, verge, and litecoin cash — have fallen victim to 51% attacks in the span of just one month. These aren’t theoretical vulnerabilities discussed in whitepapers anymore. Attackers are actively hijacking networks, rewriting transaction histories, and walking away with millions of dollars in stolen cryptocurrency, targeting exchanges as their primary cash-out mechanism.

Bitcoin traded at $7,624 on June 8, 2018, barely moving in what MarketWatch described as the tightest weekly trading range of the year — just 5.3% from bottom to top, stuck between $7,300 and $7,800. Ethereum sat at $601, also relatively flat. The calm in major markets, however, masked a brewing storm in the altcoin space, where smaller networks with limited hash power were proving dangerously vulnerable to well-coordinated attacks.

Catalyst Identification

The catalyst behind this sudden spike in 51% attacks is deceptively simple: economics. NYU computer science researcher Joseph Bonneau published research in 2017 estimating how much it would cost to execute these attacks by renting computing power rather than purchasing expensive mining equipment outright. His conclusion was stark — the cost was far lower than most people assumed, and attacks were likely to increase.

Bonneau himself expressed surprise at how quickly his prediction materialized. “Generally, the community thought this was a distant threat,” he told CoinDesk. “I thought it was much less distant and have been trying to warn of the risk. Even I didn’t think it would start happening this soon.”

The attacks follow a consistent playbook. Bad actors amass more than half of a network’s total hashing power — something feasible on smaller chains with modest security budgets — and then exploit that majority control to execute double-spend attacks against exchanges. The bitcoin gold attacker successfully double-spent two large transactions sent to an exchange. The zencash attacker pulled off three separate attacks, making off with more than 21,000 ZEN tokens worth over $500,000 at the time.

Key Players to Watch

The victims tell a revealing story about where the risk concentrates. Bitcoin gold, a Bitcoin fork with a market capitalization still in the hundreds of millions, was compromised despite its relatively high profile. Zencash, a privacy-focused fork of Zcash, was hit multiple times, suggesting attackers found a repeatable exploit. Even verge, which had already suffered a previous attack exploiting insecure code in its protocol, was targeted again through its lower protocol layer.

EOS, meanwhile, sat at position number five on CoinMarketCap with a price of $14.04 and a market cap of $12.58 billion, fresh off its record-breaking $4 billion ICO that raised 7.12 million ETH. The contrast was stark — while well-funded projects like EOS were launching mainnets and building infrastructure, smaller altcoins were struggling to maintain basic network security.

Litecoin, ranked sixth with a price of $120 and a $6.8 billion market cap, and Cardano at $0.205 with a $5.3 billion market cap, were large enough to resist such attacks. But the long tail of altcoins below the top 20 — many with market caps under $1 billion — faced existential questions about their security models.

Risk Assessment

The implications extend far beyond the immediate financial losses. Every successful 51% attack undermines confidence in the fundamental security premise of proof-of-work cryptocurrencies. If a network can be compromised by anyone willing to rent sufficient hashing power for a few hours, the entire “trustless” value proposition comes into question.

Exchanges bear the brunt of these attacks, since they’re the targets where double-spent tokens get converted into other cryptocurrencies. This creates a secondary risk: exchanges may delist vulnerable coins entirely, destroying liquidity and effectively killing projects. Several exchanges had already begun requiring dramatically higher confirmation counts for deposits from smaller PoW chains, slowing transactions and degrading user experience.

The cost factor is particularly alarming. Bonneau’s research demonstrated that renting hash power through services like NiceHash could make attacks economically viable even on networks that previously seemed secure. As hash power rental markets mature and become more liquid, the barrier to launching a 51% attack continues to drop.

Strategic Conclusion

For investors and participants in the altcoin market, the message is clear: hash power matters more than hype. A cryptocurrency’s security budget — the total economic cost required to attack its network — should be a primary consideration in any investment thesis. Projects with low hash rates, regardless of their technological promises or community enthusiasm, carry a fundamental vulnerability that no amount of marketing can fix.

The wave of 51% attacks in June 2018 may represent a necessary maturation event for the cryptocurrency space. Just as exchanges learned hard security lessons from the Mt. Gox era, proof-of-work networks are now confronting the reality that economic incentives cut both ways. The networks that survive will be those that can attract sufficient mining interest to make attacks prohibitively expensive — or those that adopt fundamentally different consensus mechanisms altogether.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, including the potential for total loss. Always conduct your own research before making investment decisions.