Verge 51% Attack

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Verge

The Verge blockchain requires miners to switch between 5 different algorithms when mining, which is intended to slow down the mining and prevent the development of specialized mining machines. However, a bug in the algorithm allowed the same algorithm to be run multiple times in a row by faking timestamps.

There don't appear to have been any losses in this case, however the price of the token was evidently impacted by the additional token minting. The vulnerability has been fixed by adding additional redundancy checks on timestamps. Users have to download new wallets.

This is a global/international case not involving a specific country.

About Verge

"Verge provides the security of blockchain based payments to everyday users with easy to use software tailored to real life needs and applications." "Verge gained attention in April 2018, when the world’s largest streaming pornography site, Pornhub, began accepting the cryptocurrency as an alternative way for clients to pay live webcam models."

"Verge (XVG) experienced multiple 51% attacks in 2018."

"In a short period of time, the attacker made off with around 250,000 coins."

"Verge uses five different cryptographic algorithms for mining, switching to a new one for every block, but the attacker figured out a way to fake the timestamps of his/her blocks, permitting them to be mined all with one algorithm. Because of this, he/she was able to capture the majority of the network’s mining power with far less computing power than would normally be required."

"The company came to its defense, calling the breach a “small hash attack” that has been “cleared up now” on Twitter."

"We had a small hash attack that lasted about 3 hours earlier this morning, it's been cleared up now. We will be implementing even more redundancy checks for things of this nature in the future!"

"The hack was discovered by “ocminer,” a poster on Bitcointalk forums, yesterday afternoon. According to ocminer, the attacker took advantage of “several bugs” in Verge’s code to mine an extraordinarily large number of new blocks on Verge’s blockchain, in turn rewarding him/herself with a large number of coins over a very short period of time."

"Ocminer and several media outlets called this a 51% attack, which is notable because this type of attack is theoretically possible on other blockchains which rely on proof-of-work (PoW) validation mechanisms."

"The attack is particularly serious as it requires a hard fork to exclude the blocks the attacker has mined. It’s also notable because it shows that even a seemingly foolproof PoW system can be compromised."

"[T]he over 20 Million XVG which were instamined by the attacker won't be blacklisted, reverted, filtered or rolled-back in anyway according to the verge-dev, so in my opinion you all (the miners and investors) got betrayed about that 20 M coins .. For some it might be only a few coins, for some it might be a lot.. For some this might all be drama for them, I see you there of course.."

"Verge (XVG) managed to implement a patch within 72 hours, including prepared updates for the wallets." "Verge was extremely impressed with the response time from Bittrex and Binance after a call was placed informing them of what was happening. They took immediate action and proactive measures to provide protection to all accounts and transactions. With so many exchanges popping up these days, unparalleled support like that is crucial to the ongoing success of cryptocurrency. This was also the case for all mining pools, as they have a direct line of communication to the team at all times."

"We will be releasing a new Qt wallet for windows and Mac OS tomorrow, along with a detailed explanation of the mining exploit we dealt with. thanks everyone for being patient!"

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Verge 51% Attack

Date	Event	Description
April 4th, 2018	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost has been estimated at $1,074,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

There were no losses from this incident to any exchange platforms.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.