Feathercoin, the new Scrypt-based coin based on Litecoin, suffered a widespread attack over the weekend, leaving its founder scrabbling for fixes.
The method for the assault was a 51-percent attack, which occurs when someone gains enough hash rate to create his or her own blockchain. This gives the attacker the ability to bring the authority of the original blockchain into question, and creates "orphan" blocks in that blockchain.
It was the latest in a series of attacks against the coin, said Peter Bushnell, the UK-based founder of the altcurrency - but this one was different.
"I saw this not long after the attack started two days ago," he said. "It was nothing new and we see these once in a while. Exchanges had safeguards in place. What then happened is that the attack did not stop. They seemed intent on orphaning every single block. It seemed to stop when we hit the new difficulty and the hash rate went up."
The attack was marked by a dramatic increase in the hash rate on the Feathercoin network, said Bushnell. The network was operating at a sustained 0.2 Gigahashes/sec prior to the attack. It jumped to 1.5 Gigahashes/sec, he said. That hashing power could have been redirected from any existing Scrypt-based pool, including a Litecoin pool.
Bushnell said he believes the people behind the attack might be linked to another attack that occurred on May 23, the day the coin went through a hard fork to reduce its difficulty. On that day, a mining pool solved a block ... but then Bushnell found the block had been orphaned by someone mining from a vanity address, "feathercoinsucks". This suggests it was a malicious attack to undermine the coin.
This latest attack was different from other attacks, though, said Bushnell. Most other times, attacks will happen when the price of the coin rises, but they will stop when the price drops.
"The difference is that this time the markets continued to rise," he said. "I do not think they will simply leave this time as they did last time. What is happening now is unprecedented. I have never seen a multi-pronged attack of this scale before."
One thing that helped to save Feathercoin from the latest attack is the community of automated coin pools. These are Scrypt-based mining pools that decide what Scrypt-based altcoins are mined on, based on their profitability.
"When the difficulty changed, we became most profitable, and the pools switched to us," Bushnell explained.
Around 80 blocks were orphaned in the attack, according to Bushnell.
"About 16,000 coins went to the attackers in this attack," he said. "This is the proceeds of mining those blocks which orphaned ours. Those coins should have been in our miners' pockets."
Apart from taking profit from legitimate miners, orphaning blocks can be damaging to an altcurrency, because the orphaned blocks also contain transactions, which must then be re-transmitted. The attack also caused BTC-e to begin manually checking transactions, rather than relying on automated confirmations, which further hinders the coin.
Several people in the Feathercoin community are calling for the altcurrency to "roll back", reversing itself, and effectively starting again from the time before the attack happened. This would cause the blocks to be mined again.
"I doubt some people like BTC-e would be interested in doing such a thing," Bushnell said.
Bushnell believes multiple people are behind the attack. Similar attacks have occurred on Litecoin, and Bushnell thinks the attackers might have moved on to attack Feathercoin instead, now that Litecoin's difficulty has risen so much.
Feathercoin was still dealing with problems today. Feathercoin's main website is currently under a distributed denial of service (DDoS) attack.
"There is an attack on everything to do with Feathercoin," Bushnell said. "They have got more advanced since this used to happen to Litecoin."
Coinchoose.com, a site that tracks altcoin statistics, had removed Feathercoin from its listings following the attack, causing the coin to also disappear from Wheretomine.com (which pulls its listings from Coinchoose.com). People in the community were lobbying to have the listings reinstated.
"I figured the market would react negatively to all this news but the buy support has stayed strong," Bushnell said. "It shows that there is a lot of confidence in Feathercoin. We will get through these attacks I have no doubt about that."
But he also thinks the attackers will come back: "I think that they will stick around this time as we did not die last time as they probably hoped."
Update: Feathercoin has now implemented a new feature called 'Advanced Checkpointing'.