Ethereum Classic is undergoing a possible 51% attack

Singapore, SINGAPORE – A few days ago, Coinbase detected “a deep chain reorganisation of the Ethereum Classic (ETC) blockchain that included a double spend”. What the exchange did was to immediately suspend interactions with the ETC blockchain and temporarily stopping Coinbase send/receive transactions. Trading on the platform still commenced. Since then, there were more than 10 reorganisations – affectionately called “reorgs” – with many containing double-spends by exploiting the proof-of-work model of mining with transactions supposedly irreversible with confirmation times.

And it all boils down to sheer network hash power, creating alternate block histories and sending the same ETC coins to different addresses with blockchain data quickly re-transcribed and forked maliciously.  In total, it has been suspected that 219,500 ETC were jacked as a result of these double spends. That equates to approximately just a little more than US$1 million at press time. Another exchange in Gate.io has also confirmed that it has lost crypto funds due to this. While other tokens such as Verge (XVG) have suffered a similar attack in the past.

ETC price chart over the past week. Source: CoinMarketCap

Forget non-negotiable immutability, it seems that individuals are trying to steal ETC by quickly reversing the transactions due to a vulnerable network. Litecoin (LTC) creator Charlie Lee chimed in saying that “by definition, a decentralised cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources”. He adds that if “a crypto can’t be 51% attacked, it is permissioned and centralised.”

ETC developers have chalked it up to “selfish mining” as opposed to an attack on more than half of the circulating pie. And that double spends did not occur. Blame has also fallen on new, more powerful ASIC miners and not hackers violating hashing algorithms. The price of ETC is currently hovering around US$5 with a slight uptick and doesn’t seem to be affected by this intrusion into its networks.