Coinbase security engineer Mark Nesbitt revealed in a medium post that Vertcoin’s network has been repeatedly 51% attacked.
Vertcoin aims to be an ASIC resistant alternative to Bitcoin. The latest attack included four block reorganizations, all of which resulted in double-spend transactions. Nesbitt estimated that “these attacks could have resulted in the theft of over $100,000”.
— Vert-tracker (@Vert_tracker) December 4, 2018
Exchanges do 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 This is because exchanges allow deposits to be quickly traded into different assets and then withdrawn (after a certain number of blockchain confirmations).
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.
$119 an hour for a 51% attack
According to the latest data from crypto51.app, Vertcoin has a current hash rate of three terra hashes per second (under the Lyra2REv2 hashing algorithm). Based on the available hash rate at NiceHash, a 51% attack would currently cost only $119 an hour. A similar attack on the Bitcoin network would cost over $250,000 per hour.
It’s also worth noting that NiceHash currently have over 14 TH/s (over four times the current Vertcoin hash rate) available to rent to potential attackers. The Lyra2REv2 hashing algorithm is also used on a number of other blockchains, including Monacoin, NIX, Galactrum, Rupee, and Starks.
Bricking ASICs with version 3
At the end of November, the Vertcoin team announced the Lyra2REv3 hashing algorithm upgrade. Its objectives are to “brick existing ASICs, reduce the inherent advantages of ASICs/FPGAs over GPUs, and enable hard forking in a fast/secure way.”
These attacks on Vertcoin are not the only examples of a successful 51% double-spending attack. Earlier this year, 51% attacks also occurred in BTG, XVG, and MONA. These types of incident show that threats exist for resourced, sophisticated, and motivated actors who could execute this kind of attack.
Mark concluded by saying that: “As long as exchanges are willing to provide customers with assets in response to the deposit of a reversible currency, there’s no reason for attackers to stop this behaviour. Expect to see more of these attacks.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.