I'm sure you've heard by now that the 'Verge Cryptocurrency' has been under attack. In particular a 51% attack.
For those of you that don't know, a 50% attack occurs when 51% of a coins network is controlled by one user. This allows them to completely own the network. In the case of Verge, they were able to take mining fees for all new coins, via a timing exploit. This has even caused a hard fork of Verge, and may mean that the coins are valid even if the hackers are caught.
This is not good new for crypto currency. The fact that Bitcoin has been running for a decade without any hacks is a good sign. But bitcoin is not imune to this type of attack. The cost of mining means that 51% of the network is actually controlled by a small number of large scale miners. The good thing is that its not in their interest to damage the reputaion of the massive botcoin reserves they hold.
The think that makes the 'VERGE' attack is the purpose of Verge. ITs a privacy coin. While I'm making no assumptions abobut the users, it makes sense that these people don't want their funds to be open. There is a good chance that money stored with coins like 'Verge' is not entrielly from legitimate sources.
I would compare this attack to a real world scenario. A banks Safety deposit box thefts are unlikely to be reported fully due to their very nature. Money stored in privacy coins has a built in incentive for thieves. They are unlikely to have anyone admit to its loss.
Security in a privacy coin should therefore be its main concern. The 'Proof of Work' Algorythem had already been widely criticised. Many other coins have moved to 'Proof of Stake', and there measures that make a 51% attack impossible.
But this highlights one thing. The un-hackable reputation of crypto curency will come under scrutiny. Bitcoin will remain '51% Attack' vulnerable for the forseable, and other coins that run DApps have their own issues. Running code on any system will give hackers a window into the project.
The prolification of cryptocurency into the mainstream, will make it more secure, as long as the minion id not centralised.
But I would hope that this 'Verge' attack will be a warning.
I'm interested in others thoughts
