Popular privacy coin, backed by a zealous crypto community Verge, fell prey to a 51% attack yesterday, after which the currency was forced to fork. A miner gained access to majority control of the network’s hash rate after which 250,000 coins amounting to over $1 million were stolen. To gain control back and secure the network, the developers of Verge had to create a hard fork of the currency. The popularity, as well as the security of the coin, is now under question.
Popular user announces the threat
The news of the Verge (XVG) hack was announced by ‘ocminer’ one of the most prominent Bitcointalk forum members. He said that 51% attack had been enabled with the help of a bug in the system. It allowed the malevolent miner to create new blocks in the network using the same algorithm after spoofing the timestamps.
During normal network transactions, every new block has a different algorithm. This helps in controlling the hash rate and ensures that no single miner gets enough power to manipulate the system. While the hack was in progress, the attacker was able to use several exploits in the XVG code so he could create multiple new blocks within seconds.
The attacker didn’t stop there. He used the scrypt algorithms to perform this attack, which was considered an impossible feat within the community. He went on to confirm several hundred blocks within three hours. No coding could have been able to rollback the damage that the blockchain suffered. Only a rollback to the blockchain could help the coin to overcome this issue.
The miner who attacked the blockchain also went on to taunt the network developers. He left a message for the team in a forum, saying, “Hey Verge Team, get some real developers and fix your code.
We have found another 2 exploits which can make quick hashes as well.”
The Lead Develop of Verge, Justin, quickly ran an emergency commit to handle the issue but could only be successful in his second attempt. Now, the currency has no other choice but to hard fork to fix the problem.