Verge hacks: Inside job or utter incompetence of XVG developers?

Two hacks in matter of couple months? Are the people behind Verge coin incompetent or was this an inside job? Pick you poison as we don’t know what is worse: Competent + inside job OR incompetent + outside job.

In case you haven’t heard – their blockchain protocol was hacked again two days ago.

Back in April, similar situation:

Usually to successfully mine XVG blocks, every “next” block must be of a different algo.. so for example scrypt, then x17, then lyra etc.

Due to several bugs in the XVG code, you can exploit this feature by mining blocks with a spoofed timestamp. When you submit a mined block (as a malicious miner or pool) you simply set a false timestamp to this block one hour ago and XVG will then “think” the last block mined on that algorithm was one hour ago.. Your next block, the subsequent block  will then have the correct time.. And since it’s already an hour ago (at least that is what the network thinks) it will allow this block to be added to the main chain as well. This is what is going on since about 06:00 UTC of 04.04.2018. Here is a full explanation of the first hack and as it seems, the same thing was exploited again.

The amount of trust that any logical and rational investor should have in $XVG, its developers and the leaders of its community should be sitting at around ‘0’ at this point in time.

There has been absolutely no transparency in their behavior, actions, standards, or any other bar/measure of conduct.

In a lengthy write-up on this topic, CryptoMedication brought a lot of evidence that this could be an inside job.

He highlights couple of things, that are particularly troubling:

18.6 million Verge were estimated to be stolen on April 4th-5th.
18.5 million Verge were transferred from a wallet that Verge owns directly too Binance a week and a half later.
The excuse given was that the payment was needed for ‘Ledger Wallets’, which is demonstrably false.
The same hack/vulnerability that the devs claimed to have fixed at that point in time, was exploited yet again just 2–3 days prior to me writing this.
The actual fix for this issue exists, yet apparently has not been pursued for some reason.
All of this evidence begs the question of whether or not this is an inside job at this point.

He further argues that given the price deficit and the cheesy model of using overhyped partnership announcements to boost the price of the currency, it seems as though $XVG is running out of options and the 80%+ price decrease since it’s ATH indicates as much as well.

The author finishes with a quite logical question for all those that are still holding $XVG, my only questioning remaining is:

When will you finally sell?

What is even more astounding is that, even after the initial news of the attack on the chain, there was NO decrease in the total price of XVG.

There are a lot of coins like this and it costs a lot of unknowing “investors”. But, it’s a good learning lesson though and it serves as a warning to all of the serious projects.

If you’re investing in coins like XVG with the thought that it’s a strong cryptocurrency, I would highly advise against putting money in cryptocurrency until you step back and look at the fundamentals of what makes a cryptocurrency strong. It’s about network security, it’s about resistance to attack, and it’s about eventually being autonomous from a central authority, just to name a few points.

 

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Rene Peters

Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

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