Electroneum and Verge 51% attacks happened within days of each other.
In terms of Verge (XVG) there was an attack against the network. Users noticed blocks mined faster than normal just as what happened with Electroneum (ETN). This typically means that some miner is puffing out its chest with a boatload of huge hashing power.
The news crashed the price of XVG by more than 23% overnight, down to $0.052. Still, those levels have not wiped out all of the gains since last week. Nonetheless XVG remains extremely vulnerable to unraveling, as the fears of the mining exploit lead to selling. This also happened with Electroneum
Electroneum suffered a 51 percent attack, which was discovered when they noticed a huge amount of empty blocks were being mined on the Electroneum’s blockchain one after another, followed by a sudden drop in hashrate.
CryptoNote is the technology that Monero, Electroneum and some other cryptocurrencies are based upon. CryptoNight is the name of the hash function that is used in the CryptoNote Proof-of-Work (POW) algorithm.
In the case of Verge, the developers claim that around 250,000 XVG were stolen by the attacker but some in the community says it could be upwards of 3.9million XVGs! The attacker was able to mine multiple blocks one second apart using the scrypt algorithm. This feat would have had been impossible if not for the bugs that existed in the code of Verge’s blockchain, as pointed out by the BitcoinTalk user, ocminer.
The XVG team confirmed via Twitter that a vulnerability in the Verge protocol was exploited.
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! $XVG #vergefam
12:06 PM – Apr 4, 2018
But despite Verge developers’ claims that the attack is over, the block explorer is still showing transactions with block rewards coming in every few seconds. The XVG block reward is 1,560 coins. The Verge mining protocol has a vulnerability that accepts blocks with a fake timestamp, allowing malicious miners to submit blocks that are accepted on the main blockchain.
Richard Ells of Electroneum isn’t saying much publicly about the details of the ETN attack but word on the street is that it, too, was a 51% attack.
The good news is that Richard Ells, Electroneum CEO, just brought on board a new developer with great communications skills and blockchain experience. His LinkedIn profile is here: https://www.linkedin.com/in/andrelpg/. Another developer is on his way into the team.
There are rumours that Bitmain is not happy with Monero’s decision to hardfork. This ruins Bitmain’s plan to roll out and sell ASIC mining rigs
Another rumour going around is that the BIG Power Mongers whose livlihood and power is threatened by Cryptocurrency are behind these attacks.
We have no facts associated with these rumours but they do make for animated speculation talk at the dinner table.
The Verge team will be planning a hard fork to fix the issue. However, it is unknown whether the blockchain would be rolled back to an earlier stage before the exploit, or the hacker would be left with all the block rewards for hours of mining, while other miners’ blocks were rejected.
I am sure Electroneum is planning for a hardfork even though we’ve heard nothing official yet. And they do plan to upgrade their source code after Monero completes their hardfork.
At this point, the vulnerability in both Electroneum and Verge’s software is still present, and anyone could over-mine their coins. The biggest fear is a big selling of coins on the markets. However, it is unknown whether the malicious miner has those intentions. I would love to be a fly on that wall.
Back in 2014, Ghash.io had come dangerously close to monopolizing 51% of the bitcoin network’s hashing power. The pool was able to gain 42% of the network in January 2014, and shortly thereafter, they actually reached an astounding 50%.
Krypton and Shift, two blockchains based on Ethereum, suffered 51% attacks in August 2016.
IOTA’s Tangle, a distributed ledger that is fundamentally different than a blockchain but designed to accomplish similar goals, could theoretically suffer a 34% attack if an attacker owns one third of the network’s hashrate
Quite frankly, there is nothing preventing any Proof of Work blockchain from experiencing a 51% attack. It can happen unannounced at any time.
- Proof of Work (POW) is an extremely inefficient process because of the massive amount of power and energy that it consumes
- Anyone or group of folks/companies/organization that can afford faster and more powerful ASICs have a better chance of earning mining rewards than others.
- Thus, bitcoin and other cryptocurrencies aren’t as decentralized as they purport to be.
You can theoretically get a few big mining pools to join forces to initiate a 51% attack. The liklihood of that happening with Bitcoin is next to none since they would be in essence attacking their own profits.
Imagine government entities or the elitists owning 51% of the hashpower of any blockchain and attempt to destroy cryptocurrencies since it is indeed a threat to their FIAT debt printing monopoly.
Proof of Stake (POS) makes it more difficult to carry out a 51% attack because the attacker would have to purchase 51% of all of the available coins! Vitalik Buterin is launching Casper which will make Ethereum a POS cryptocurrency. But Casper’s POS implementation is different from the typical POS approach. I will write another article on that later.
I’m getting too technical here.
The bottom line is BOTH Electroneum and Verge developers will have to do a Hard Fork.
A hard fork is seen as the best recourse when a 51 percent attack occurs in any blockchain in order to secure the network. The hard fork changes the mining algorithm which gives it a brand new start and thus securing the network. So what is to prevent it from happening again? Well shucks! It really happened because of bugs in their software. They need to make sure they plug the holes and recognize that the blockchain is the MOST important component of their business!
My question to you is: Does this 51% attack possibility concern you at all ?
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Until Next Time…
Faith Sloan “QueenWiki”
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