Vertcoin is a lesser known project, but it’s becoming more familiar for all the wrong reasons. You might not know it by looking at the price action, but Vertcoin (VTC) is currently under a 51% attack, with a wave of reorgs and double-spend activity currently unfolding.
Coinbase Security Engineer Mark Nesbitt published a blog post about an ongoing investigation into nearly two dozen “deep chain reorganizations” in Vertcoin, more than half of which included “double spends of VTC” worth more than $100,000. Chain reorganizations are akin to the blockchain version of alternate timelines you see in superhero movies, only in real life, no one saves the day. The biggest reorg had a “depth of 307 blocks and a length of 310 blocks.”
Vertcoin isn’t the first cryptocurrency to suffer a 51% attack, and it probably won’t be the last. Bitcoin Gold and Verge came under similar attacks this year, exposing the vulnerabilities in the Nakamoto consensus algorithm.
As for Vertcoin, Nesbitt outlines four separate attacks, the most recent of which began on Nov. 29 and continues today. The incident is comprised of four reorgs and double-spends were part of all of them.
Some in the VTC community were quick to blame the developers, volunteers who are feverishly trying to fix the problem with an upcoming hard fork and who want to eliminate rented hash power and ASIC-fueled mining on the network. Vertcoin devs aren’t aware of any “culprit” or “victim.”
Some people have complained that we have not said anything about the 51% attack. Well, some of us have been working on the solution. The rest of our team was taking time to create a response to help educate the public on such attacks. Below is that response. $VTC #Vertcoin https://t.co/QaQZibBmXv
— Canen (@Canen01) December 4, 2018
Plenty of Blame to Go Around
Coinbase’s Nesbitt, meanwhile, went for the jugular, linking ASIC resistance with the security of a cryptocurrency like Vertcoin. But as Satoshi Nakamoto stated in the white paper: “The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes.” Nesbitt pointed to the ASIC resistant nature of Vertcoin:
While a full exploration of ASIC resistance is out of scope of this article, the observations above strongly suggest that pursuit of ASIC-resistance in a coin is counterproductive to the coin’s security.
Vertcoin is an ASIC-resistant project, but according to one of the developers VTC “is mined with public ASICs now,” which the team plans to fight with an upcoming hard fork dubbed Lyra2REv3.
Vertcoin developer Eric Kubik disagreed with Nesbitt’s characterization of the facts, saying rather than “ASIC resistance” the issue is tied to NiceHash, which if true has been anything but nice to the project. NiceHash is a Slovenian marketplace for buying and selling hash power.
The Reddit community was quick to blame ASICs, suggesting the ASIC-resistant project should have removed ASIC-powered hash power. Meanwhile, Vertcoin shares software developers with the MIT-DCI Lit Lightning Network, including Gert-Jaap Glasbergen, who explained on social media:
This isn’t caused by the ASICs but by Nicehash. There’s too much hashrate for rent at too low a price resulting in zero capex and low opex to do attacks.
Vertcoin devs are close to launching the fork, which is designed to “temporarily stop mining outsourceability.” The devs argue that while ASICs may bolster the security of the Bitcoin network, they have the opposite effect on smaller networks like Vertcoin.
The team is sold out and say they “will NOT compromise on decentralization by implementing centralized controls and…will not give up on fighting ASICS.” In the interim, they’re urging investors to “protect yourself against double spends.”
The author is not invested in any digital currency mentioned in this article but is invested in other cryptocurrencies.