Ethereum Classic, the 16th top rated currency by market cap ($549 million) has become a victim of 51% attacks on the chain. Coinbase alleged that the attacks were a result of double spending while Ethereum Classic has been denying the allegations. Bitfly confirmed recently through their twitter that ETC has been attacked,
Ethereum Classic is one of the 5 cryptos primarily supported by Coinbase at the moment and as a part of their commitment, Coinbase monitors the blockchains for any security issues. They recently found out that there have been deep reorganizations in the blockchain of Ethereum Classis and upon investigation, it was found out that most of the reorganizations contained double spending activities due to which they have also suspended any activity related to Ethereum Classic on their platform. According to Coinbase,
The total value of the double spends that we have observed thus far is 88,500 ETC (~$460,000).
Ethereum Classic, however, has been denying any relation to the allegations made by Coinbase regarding the double spending. They also denied the 51% attack at first which was later on confirmed by Bitfly,
According to the team of Ethereum Classic, “Linzhi is testing ASICS” which might be the place where the hashrate came from but they haven’t totally denied the double spending too. According to them, there’s an equal possibility of both events and only time will tell what really happened. According to the latest tweet,
Proof of Work is an algorithm based on the model where miners have to solve complex cryptographic puzzles and once solved, a consensus is developed by the majority of the nodes. The issue, however, lies in the part where it is assumed that majority of the nodes in the blockchain would be completely honest to form a consensus. This is where hackers get the edge but in order to make a 51% attack, they would need to have control over 51% of the mining hardware. Upon asking Jackson Palmer, the creator of Dogecoin if he thought that PoW might be the one to blame here because of the centralized nature of puzzle solving and forming a consensus (Through computing powers and mining hardware) he told BlockPublisher,
Consensus mechanisms are about aligning incentives to output a decision in the least centralized way. They are not designed to be flawless.
According to Jackson Palmer, ETC is the top currency that can be mined remotely by NiceHash (Cloud mining provider) which means for a 51% attack, the attacker doesn’t even have to own actual hardware and by spending a little money they can actually rent mining hardware and carry out the attack. He clarified that it was merely a theory and there “could be various other ways it [attack] was carried out.” MatiGreenspan, the senior market analyst of eToro was of the view that ETC has a significantly lesser hashrate than ETH which might be the reason the attackers tried it on ETC and not on a network as big as Ethereum or Bitcoin.
This post was last modified on January 8, 2019 12:18 am
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