In the past, we’ve reported on various 51% attacks. Unfortunately, we find ourselves in the same situation, as yet another company has succumb to similar events.
It has been found that Ethereum Classic (ETC) was the victim of a 51% attack, resulting in the theft of over $1 million.
Sadly, despite the massive growth seen within the world of blockchain over the course of 2018, these attacks are still a valid concern.
While ETC may not be the most popular project within the world of cryptocurrencies, they remain well known. In recent months, their brand received a boost, as Coinbase expanded support for the token on their platform.
In response to the 51% attack on the ETC network, Coinbase issued a blog post detailing their actions to prevent damages to their customers.
Upon learning of the attack, the market leading platform ceased trading operations of ETC. In their blog post, Coinbase indicated the following:
“We observed repeated deep reorganizations of the Ethereum Classic blockchain, most of which contained double spends. The total value of the double spends that we have observed thus far is 219,500 ETC (~$1.1M).”
Ethereum Classic (ETC)
This project is one of the oldest active forks around. Its very creation was due to a theft that occurred years ago.
Ethereum and Ethereum Classic, were at one point a single project. Upon investors suffering losses due to theft, it was decided that the chain would be forked, with the new branch representing investor holdings from a point in time prior to the theft – thereby reversing the losses endured.
This process, however, went against the beliefs of many. Those in the ETC camp believed that although the thefts were unfortunate, no one should have the power to alter the blockchain. As a result, there were many that continued to support the original, unaltered branch. This came to be known as Ethereum Classic.
As the forked branch became the chain with the most ‘confirmed blocks and work’, it became the de-facto Ethereum that we know today.
While ETC has consistently increased adoption over the past few years, the projects acceptance pales in comparison to that of ETH.
How could this happen?
Despite not being an industry leading token, how could this have occurred on a network of this size?
While the reasons vary, there is one major one at the moment. This would be the prevailing bear market. The current climate has eliminated profit margins, which has resulted in many miners simply switching off. In doing so, various networks are left vulnerable due to the loss in hashing power. This loss means that it is easier for thieves to take control of the network, as it become much easier to attain 51% of the networks hashing power.
Despite the vulnerabilities evident within the network, and the resulting theft, ETC market price has escaped relatively unscathed. While the token saw prices drop roughly 10%, it has since recovered.
This is surprising, as it indicated investors either don’t understand what happened, or simply do not care.