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$100,000 Lost In Vertcoin Attack
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$100,000 Lost In Vertcoin Attack

There have been some serious attacks going on by Vertcoin which is resulting in $100k of double spending on the network. The Bitcoin-replica was launched with an aim to discourage miners from forming pools and gaining a monopoly over its network being compromised.

The security expert, Mark Nesbitt has revealed that the blockchain of Vertcoin is under a 51 percent attack. The Coinbase engineer found that unknown cyber attackers rented a large volume of ASIC hash rate to infiltrate the four-year-old cryptocurrency network. In the end, they got hold of more than 50 percent of the mining hash rate which allowed them to own and govern the Vertcoin public chain literally.

As reported by CCN, the integrity of a PoW cryptocurrency all relies on the distributed nature of the network. It is considered decentralised when no miner of the mining pool has more than 50 percent of the network hash rate. If a mining body somehow gets control of the majority of the hash power, then it could create different blocks from any arbitrary previous block by creating two versions of the same blockchain. If an alternative blockchain begins to produce more blocks that the rest of the network, then it could lead to a situation termed as chain reorganisation.

It’s worth noting that if a miner has “a large number of coins, it can also launch a double spending attack on the network. For instance, a miner can initiate a transaction on the main chain, but it can replicate the same transaction on the alternative fake chain as well.”

As a result of this, both the transaction send the same coin, and only one of them can be confirmed which will leave the other to be invalid.

Nesbitt explained:

“In 4 distinct incidents, the latest of which is currently ongoing, Vertcoin (VTC) experienced 22 deep chain reorganizations, 15 of which included double spends of VTC. We estimate that these attacks could have resulted in a theft of over $100,000. The largest reorg was over 300 blocks deep.”

The security expert has actually warned exchanges that were involved in trading of PoW based altcoins and the potential losses, blaming their lack of effective countermeasures.

He continued to say:

“This is because exchanges allow deposits to be quickly traded into different assets and then withdrawn. An attacker can make a soon-to-be-reversed deposit, trade for another asset, move the new asset off the platform, and then reverse the original deposit.”

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Robert Johnson

Robert is a keen investor with a particular interest in cryptocurrencies. He has been involved in the industry for many years, and because of this, has gathered a lot of knowledge surrounding this area. He studied English at university level and has a passion for writing. He loves being able to combine his two mains interests on a daily basis.

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