A response from a contributor | double spends
It has come to my attention that a block reorg has taken place on the Vertcoin chain. For a while, the danger has already been quite clear. I actually wrote about it earlier this year. In contrary to how most people responded, the VTC developers actually commemorated Bittrex’s high confirmation count. However, with the recent reorgs being extremely long, I am unsure if they have proven sufficient. The developers are close to implementing a fork.
First of all, it is important to note that preparations for decreasing the danger to all affected parties have been taking placing since before the event. The core of the issue comes from services that sell outsourced hashrate and centralized ASIC manufacturers. The latter is a recent threat that has made the former even greater. I can now unquestionably and undeniable confirm that “ASIC hashrate” does not make a cryptocurrency network more secure. The work on Lyra2rev3 and Verthash are subsequent moves to diminish and hopefully eradicate all risk to parties using the Vertcoin Network.
Between the end of November and the time of writing, there have been several attempts at doublespending on the Vertcoin network. We can observe several relatively large reorgs. I am not aware of the victim or culprit, but several members of the Vertcoin community and developers are keeping a close eye on the network and I would advise everyone to do the same thing.
How is VTC going to fix it?
Vertcoin was founded in 2014. Ever since then, the protocol has been developed by many different users and promoted by many different people. Nobody is going to let it end here. The team have recognized the threat before this took place, and have taken actions accordingly. Different members of the team and community have approached exchanges with the request to increase deposit confirmations and the developers have been working on two bespoke algorithms.
Lyra2REv3 will be the first algorithm change. This algorithm change is focused ridding the network of ASIC miners that have plagued the Vertcoin network in the past month. This fork should also temporarily stop mining outsourceability. Our future work will focus on improving the ASIC and outsourceabillity resistance.
Is this thanks to not embracing ASICS?
A common argument against ASIC resistance is that ASICs will provide the power to secure the network against attacks. This statement in itself, is utterly false. It may hold somewhat true for Bitcoin, but on smaller networks, ASICS either enormously centralize the hashrate or flood the renting market with cheap hashrate. Neither of the two provide good security.
Another argument is that ASICs have no motivation to attack the chain. However, experience has shown this to be false as well. Especially because ASIC owners are susceptible to short-term thinking like everyone else (and far more economically minded). If they can get a better return for their hashrate by renting it out, they will do so without question.
In a world where hashrate can be rented, it matters not what devices generates it. The barrier to entry to performing double spends will always be roughly proportional to the electricity cost of obtaining majority hashrate for however long it takes to perform a double spend.
The final argument, which is also made by Mark Nesbitt from Coinbase in his article on this topic, is that anyone in the world can attack a general purpose mined chain, whilst attack an ASIC chain is exclusive to its existing miners. This argument is somewhat shortsighted, mostly in the sense it is approached from purely a security perspective. If we phrase it differently, you will see the true value of ASIC resistance in the same sentence.
In an ASIC mined chain, only some people can participate to consensus.
In a commodity hardware mined chain, everyone in the world can contribute to consensus.
The more distributed the source of consenus is, the greater number of persons participating in it, the harder it becomes to coordinate them or overcome them to perform attacks requiring majority hashrate.
What is your endgame?
ASIC resistance has proven to be an uphill battle. We understand that resisting ASICs is a time and resource-consuming process. Several developers have worked on new algorithm implementations. Most of the work however goes into making sure the entire ecosystem supports that new algorithm. Everyone actively involved with Vertcoin believes that egalitarian accessibility to mining is crucial to the long term viability of a blockchain based currency as a backbone in a global financial system.
The goal is to make an algorithm that is not easily outsourcable and to decrease the efficiency of any potential ASIC to a point where its edge becomes negligible. I also strongly believe that due to increasing pressure throughout the ecosystem, other coins will move away from ASIC resistance.
Many other teams/coins are dealing with weak networks through centralized controls such as checkpointing mechanisms, masternodes, DPOW, etc. All of which are unaceptible options for Vertcoin due to their mostly centralized nature. I do strongly believe that these options are not in the best interest of Vertcoin or its community. The important thing to consider is that these solutions do not align with Vertcoin’s focus on decentralization. Nobody on the development team is willing to accept centralized controls as fixes for the flaws of decentralized systems. Rather, their approach is that if we work hard on these issues we will come up with a good solution that adheres to the idea behind Vertcoin.
Finally, I want to say that Vertcoin is here to stay. We will NOT compromise on decentralization by implementing centralized controls and we will not give up on fighting ASICS. We ambitiously aim to become the dominant mining algorithm for GPUs in the future.
In the meantime, please ensure you protect yourself against double spends. There is no damage being done to the blockchain, you can still use the network. However, please make sure you give larger transactions plenty of confirmations so that you can be certain your money is safe.