VERGE - Screwed up Big Time - Latest Hack Attack Destroyed Company's Reputation

‘’Privacy as a choice. A secure and anonymous cryptocurrency’’ as it displays on the website, Verge is known to be one of the most privacy oriented platform. Despite of their super protective mechanism they faced a serious hack attack. Company misplaced its 250,000 tokens worth a million dollars. Also the developers made it look like a fork because of accidental 51% attack against the network. Hacking has not been a new thing for the company. Verge’s twitter account was also hacked a few days ago.

This secure platform faced a 25% of drop in its share price which was brought down form $0.0722 to a low of $0.048. The attack exceeded Verge’s transaction volume by increasing it to $350M USD in 24 hour trading volume, but this is a boosted number as a direct result of the hack which began April 4 and lasted about a day. The loss did not stop just here. Although the attacks in crypto-world are very rare but in this case 51% of accidental attack was done which is a huge loss in itself. Due to majority of mining in the hands of hacker, Chances of Double spending can increase rapidly i.e. one coin can be spent two times. This would lead to a huge impact on the company. Same kind of attack can possibly occur on other networks that have validation mechanisms based on proof-of-work (PoW). Ethereum network also became a victim of hacks although experts say that such kind of attacks is unlikely to occur in case of Bitcoin and have never occurred in its 9 years of existence.

Verge always tried to work safe due to which it used 5 different algorithms for mining purposes. Every new block usually triggers a switch to a different algorithm until the next network block is discovered and validated. Somehow attackers managed to figure out weakness in platform’s ecosystem of not just hacking into the platform but also creating a hard fork to exclude the blocks that they mined. Company claimed that a quick fix was done to resolve the issue and get back on track which resulted into a hard fork for the Verge blockchain. Hard fork was brought into notice by Ocminer, a member of Bitcointalk. Company expressed that they were glad as the hack could have been even worse. The team decided to roll back without knowing the consequences that would come with it. 

As a result of this unfortunate event, Some exchanges disabled deposits and some mining pools have disabled Verge as they're unable to effectively compete with the a malicious miner. As Ocminer observed this event closely, He explained hacker’s activity by saying “I skimmed the logs and saw the attacker started the new attack at around block 2014060 and stopped just now at block 2026196,”. The attack could have happened to any such company but Verge had its Moto which was purely Privacy based. This platform was trusted by its investors but could not serve them right. Cryptocurrencies are always closely observed by hackers. If such events start occurring more then companies like Verge would have to face more and more troubles soon.

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