While the blockchain is the said to be theoretically immutable, there exists the possibility, albeit a slim one, that an entity can manipulate the blockchain by controlling 51 percent of its hashing power. Following Electroneum, Verge is the latest crypto to be affected.
The situation, known as a 51 percent attack, is a way in which a blockchain network an be compromised. Smaller sized blockchains are more susceptible to 51 percent because as the network grows in size, the theoretical hashing power required to control 51 percent of the network becomes impossible to attain.
Relatively small altcoin blockchains have to be on alert, making sure their code makes the network immune to a 51 percent attack. According to recent reports, it seems as if a notable altcoin blockchain has fallen victim to a 51 percent attack.
In a post on the Bitcoin Talk forum published by “ocminer,” a member of the forum, it was reported that the Verge blockchain was undergoing a 51 percent attack. According to the post, the attacker took advantage of some bugs in the blockchain code to mine blocks with fake timestamps.
As a result, the attacker was able to mine several blocks using the exact same algorithm and earning XVG coins in the process. Under normal circumstances, each mined block is created using a different algorithm to prevent any miner from hijacking the network and carrying out a 51 percent attack.
Using the bug that was discovered in the Verge blockchain, the attacker found it possible to mine blocks in one-second intervals using the scrypt algorithm. The poster on Bitcoin Talk was able to give a partial list of the malicious addresses that had been used by the attacker during the hijacking of the blockchain.
By the time the post had been made on Bitcoin Talk, the attack had reportedly been going on for three hours, but the attacker seemed to stop after the forum post was made.
Damage Limitation and Counterclaims
In the wake of the attack, the Verge development team attempted to stem the tide by utilizing a temporary fix which proved abortive. Only on the second attempt did they appear to have any success. It has been suggested that a hard fork will be required to undo the damage.
Verge did put out a statement via its Twitter account which acknowledged the attack but described it as being a “small hash attack.” The tweet also went on to assure the community that the matter had been taken care of and steps were being taken to prevent a recurrence of such an attack in the future.
On the Reddit forum, things took on another turn as a user with the forum moniker “Variable 42” dismissed the claims by Verge that the attack was a minor one. Variable 42 stated that the attacker created no less 10,000 fake blocks in about three hours and has made away with $1 million in XVG coins. The post also mentions that all of this was made possible by the ineptitude and incompetence of the Verge development team.
In another twist to the saga, the alleged attacker commenting on the same forum thread created by “ocminer” aimed jibes at the Verge team, telling them a couple more exploits had been found and that they need to up their game.