Cyber Insecurity: A Repeat Hacker Attack on Vertcoin
Vertcoin (VTC) faces yet another cyber-attack where coins were double-spent with 603 blocks replaced by the hackers’ transactions.
Understanding Vertcoin
Vertcoin is a Bitcoin clone purportedly exhibiting ASIC-resistant traits due to regular mining algorithm changes. These changes occur as a result of a hard-fork. VTC boasts of a 12.5 million dollar market cap standing at the 194th position by market capitalization in the crypto market.
Repeat Attack on Vertcoin
Earlier in December 2018, Vertcoin faced a significant attack that led to a change in its proof-of-work algorithm. Since then, things seemed to hold up, up until December 2019. Just as the month started, the VTC main blockchain lost 603 blocks after which the attackers replaced them with 553 of their blocks. During the attack, the hackers managed to transfer 125 VTC, an equivalent of $29 to their wallet address.
Salvaging the situation, Bittrex, Vertcoin’s busiest exchange by real volume, had a lockdown on withdrawals soon as they recognized the malpractice.
The 51% Attack Explained
It started as a significant increase in VTC’s hash rate rental prices for its mining algorithm Lyra2Rev3 on Nov. 30. Purportedly, there are claims that Nicehash, a hash rate rental service, conducted the attack.
It is possible that the attack run losses for the attackers. James Lovejoy, a lead maintainer of Vertcoin, revealed that the process must have required an expenditure of between 0.5 to 1 Bitcoin to complete the hack. Before the hack was stopped, the attackers only managed to secure 0.44 BTC. Therefore, the attack was a lose situation.
Lovejoy revealed in a statement, “Given the reorg was just deeper than 600 blocks, (Bittrex’s confirmation requirement for VTC), it is possible that Bittrex was the original target. But the double-spend portion attack was aborted due to Bittrex disabling their wallet before the fork could be released.”