Despite being described as potentially “the deepest reorg that has ever taken place in a top 100 cryptocurrency,” analysts are yet to confirm that the incident comprised a coordinated attack.
Coinmetrics COO Antoine Le Calvez was one of the first to notice the reorg, sharing a screenshot on Twitter showing that at least 560,000 blocks had disappeared on February 15.
— Antoine Le Calvez (@khannib) February 15, 2021
Le Calvez suggested the reorg could have been caused by a double-spend, in which a number of XVG tokens are used simultaneously for two separate transactions. However, due to the magnitude of the incident, Calvez admitted it will take some time for developers to comb through the data to establish the exactsource of the reorg.
As a result of this roll-back, any user who received or purchased XVG tokens since July 2020 may have lost their entire balance, with Deribit Insights’ researcher “Hasu” tweeting that “thousands of balances have simply evaporated.” One Verge investor tweeted that their wallet balance is now empty after the attack.
Despite the scale of the potential attack, Hasu believes it will be “pretty easy to counter,” advancing that “nodes will reject the attacker’s chain and restore the previous one.” Hasu stated the incident highlights the vulnerability of blockchains supported by GPU mining.
This isn’t the first time a reorg has been suggested to fend off would-be attackers, with Hasu referencing back to 2019 when Vertcoin succumbed to a 51% attack. The same year, after major exchange Binance was hacked for more than $40 million, founder and CEO Changpeng Zhao floated the idea of conducting a Bitcoin reorg to recover the funds, however, the idea was quickly decided against.
An unconfirmed screenshot shared by Twitter user @etn_electroneum showed XVG advisor AlexanDre stating the source is linked to some nodes who wanted to create a fork. He also added that there was not a 51% attack.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.