Sat. Aug 13th, 2022

The Vertcoin cryptocurrency is a cryptocurrency project whose aim is to ensure that mining power is decentralized. However, they have suffered yet another attack, which makes this the second 51% attack one this year. 

It is a serious incident that resulted in 603 genuine blocks from the company’s blockchain to be exchanged with 553 fake blocks, written and created by the attacker. This is according to the report given by the project’s maintainer, James Lovejoy, through a GitHub notice.

It is reported that the attack took place on Sunday, December 1st. It happened in the form of a blockchain reorganization and as a result of this, it caused five ‘double-spends’ valuing 125 vertcoin (VTC), which is approximately worth $29. To understand this in more detail, the outputs of each double-spend, are coinbase outputs that actually belong to the attacker, who transferred them to their own account. According to Lovejoy, it is not known to whom the coins were originally sent before being taken by the attacker.

A 51% Attack

To give more insight, a 51% attack means that it is a type of attack when an entity or entities take over more than half of all the blockchain network’s hashing power. As a result of this, they then hold the majority of the power to easily rewrite all the blocks, which are used to make the chain. This means that they can make changes as they wish to without the owner of the network being able to prevent these changes from happening. 

It can be remembered that exactly one year ago, Vertcoin suffered a similar 51% attack. At the time, several reorganizations were caused within the network. As a result, it was estimated that the project cost its users more than $100,000. 

Vertcoin’s main aim is to block ASICs from the network. These are powerful mining chips. The goal is to then keep the mining affordable and more community-based. At the time of the first attack, Vertcoin immediately switched their proof-of-work algorithms to one that was called Lyra2Rev3.

The Bittrex Exchange

Interesting, Lovejoy stated that they were aware that another attack was imminent. He explained that on the 30th of November this year, the company noticed a huge upswing in their hashrate rental prices for the Lyra2Rev3 on Nicehash. This occurred together with workers that are connected to Nicehash’s stratum server getting work from non-public or unknown Vertcoin blocks. Lovejoy stated that they immediately contacted Bittrex, who is Vertcoin’s main exchange, to recommend the disabling of the Vertcoin wallet from their platform, which apparently was done at the time.

Lovejoy further stated that based on the available evidence, there is a strong indication that the attack, however, was carried out by harnessing leased hashrate from Nicehash. He stated that the recent attack was identified by inspecting all the work that was sent from Nicehash’s stratum servers. It was this work that was for unknown blocks. 

When it comes to the reason for Vertcoin being attacked again, there are no answers. The main reason for this is that, according to Lovejoy, the attack would not be profitable for the attacker in any way based on the miner’s block rewards only. As a result, he suggests that maybe it was the Bittrex exchange that might have been the actual target. The fact is though, as a result of the Bittrex exchange taking caution and disabling their Vertcoin wallet, it may have saved them from even more double spends. On the flipside, Lovejoy says that the attack could have simply been as a result of sabotage.