VERTCOIN

DESCRIPTION OF EVENTS

"Vertcoin (VTC) is an open-source cryptocurrency created in early 2014 that focuses on decentralization. Vertcoin uses an ASIC resistant proof-of-work mechanism to issue new coins and incentivize miners to secure the network and validate transactions. Vertcoin's blockchain is maintained by a decentralized coalition of individuals collectively mining using modern graphics cards."

"The 51% attack on the Vertcoin network occurred between October and December 2018. Coinmonks estimated that a total of $100,000 worth of coins were double spent by an attacker in eight reorganizations of the Vertcoin blockchain. A chain reorganization or reorg occurs when a miner with more than 50% of hashrate comes up with an alternative transaction history by creating an extension of any chain and eventually replaces the network’s transaction history."

"Mark Nesbitt, a security expert, revealed that the blockchain of Vertcoin, a peer-to-peer PoW cryptocurrency, is under a 51% attack. The Coinbase engineer found that some anonymous cybercriminals rented a large amount of ASIC hash rate to attack the four-year-old cryptocurrency network. They eventually got hold of more than 50% of the mining hash rate which allowed them to own and govern the Vertcoin public chain literally."

"In 4 distinct incidents, the latest of which concluded on 12/2, Vertcoin (VTC) experienced 22 deep chain reorganizations, 15 of which included double spends of VTC." "The largest reorg was over 300 blocks deep."

"In the attack, transactions in some orphaned blocks were double spent in the eventually accepted transaction history. A total of 71,000 VTC ($50,000) were double spent. In the ensuing panic, the price per VTC decreased from $0.7 to $0.3 per coin."

"The first 5 reorgs did not include any double spends, while the [next] 3 all included double spend transactions of a total of 71,243 VTC." "There were [later] 8 reorgs in [another] incident, all of which included double spends for a total of 53,847 VTC. These reorgs were not as deep as the previous incident or either of the two subsequent incidents." "There were 2 reorgs in [early November], and we did not observe double spend transactions in either." The last set of reorgs consisted of "4 reorgs", "all of which included double spend transactions. These were the deepest reorgs observed that also included double spends, suggesting perhaps that the victim of double spends had raised confirmation requirements, forcing the attacker to expend more hashpower for each attack."

"Gert-Jaap Glasbergen, a Vertcoin developer, attributed the attack to the availability of cloud mining services and the release of specialized mining hardware for Vertcoin. Cloud mining services like NiceHash made it easy for an attacker to rent mining power at lower costs (purchasing and installing mining hardware for the same purpose is more expensive)."

"Exchanges make an ideal target for this sort of attack. 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 platform, and then reverse the original deposit."

"Exchanges find themselves with very few effective countermeasures for this sort of attack. When an attacker has greater than 51% of hashing power, no number of confirmations can make receiving deposits in the asset safe. An exchange that is under attack has no long term solution other than ceasing interaction with the asset’s blockchain. The fact that the most recent attack had a depth of 307 blocks shows the ineffectiveness of increased confirmations as a countermeasure to this type of attack."

"Some in the VTC community were quick to blame the developers, volunteers who are feverishly trying to fix the problem with an upcoming hard fork and who want to eliminate rented hash power and ASIC-fueled mining on the network. Vertcoin devs aren’t aware of any “culprit” or “victim.”"

"Vertcoin has since updated its mining algorithm to Lyra2REV3 in order to render specialized mining hardware ineffective for mining Vertcoin. There is also on-going development on Verthash, a new algorithm that will completely eliminate the use of specialized mining hardware on the Vertcoin network. The new Verthash algorithm is expected to tackle the problem of surges in hashrate due to rented GPUs. Vertcoin went from 138th in coin rankings in September of 2018 to 162nd today."

Vertcoin is a blockchain especially designed to be resistant to ASIC mining, designed to be mined with graphics cards instead. In 2018, the network suffered a series of 4 separate reorganization incidents caused by 51% attacks.

HOW COULD THIS HAVE BEEN PREVENTED?

51% attacks can be prevented through a mix of increased block confirmation times and setting checkpoints to prevent large-scale reorganizations. This means the exchange will not credit newly deposited funds, and nodes will be prevented from accepting an older attacking chain.

Check Our Framework For Safe Secure Exchange Platforms

Five most prolific 51% attacks in crypto: Verge, Ethereum Classic, Bitcoin Gold, Feathercoin, Vertcoin | CryptoSlate (Sep 29)
Verge of disaster: 200 days transactions wiped from blockchain (Oct 2)
Vertcoin - Decentralized Peer-to-Peer Digital Currency (Oct 19)
What is Vertcoin (VTC) - Simple Explanation for Beginners (Oct 19)
Vertcoin - Wikipedia (Nov 10)
Vertcoin wurde Opfer einer 51-Prozent-Attacke | Auto und Technik | GQ (Nov 10)
Vertcoin Vtc Is Currently Being 51 Attacked (Nov 10)
https://www.ccn.com/vertcoin-hit-by-51-attack-allegedly-lost-100000-in-double-spending/ (Nov 10)
Vertcoin Suffers A 51 Percent Attack - Crypto Briefing (Nov 10)
@Canen01 Twitter (Nov 10)
A Failed Hack: Hackers Attempted ‘51% Attack’ on Vertcoin (Nov 10)

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