Developers of Ethereum, the world's No. 2 digital currency by market capitalization, have closed a serious security hole that allowed virtually anyone with an Internet connection to manipulate individual users' access to the publicly accessible ledger.
So-called eclipse attacks work by preventing a cryptocurrency user from connecting to honest peers. Attacker-controlled peers then feed the target a manipulated version of the blockchain the entire currency community relies on to reconcile transactions and enforce contractual obligations. Eclipse attacks can be used to trick targets into paying for a good or service more than once and to co-opt the target's computing power to manipulate algorithms that establish crucial user consensus. Because Ethereum supports "smart contracts" that automatically execute transactions when certain conditions in the blockchain are present, Ethereum eclipse attacks can also be used to interfere with those self-enforcing agreements.
Like most cryptocurrencies, Ethereum uses a peer-to-peer mechanism that compiles input from individual users into an authoritative blockchain. In 2015 and again in 2016, separate research teams devised eclipse attacks against Bitcoin that exploited P2P weaknesses. Both were relatively hard to pull off. The 2015 attack required a botnet or a small ISP that controlled thousands of devices, while the 2016 attack relied on the control of huge chunks of Internet addresses through a technique known as border gateway protocol hijacking. The demands made it likely that both attacks could be carried out only by sophisticated and well-resourced hackers.