Over the last few days, Ethereum Classic has come under immense scrutiny because of the news reports of a 51% attack on its network.
With the possibility of a looming 51% attack, some of the exchanges, such as Coinbase and Kraken halted their respective ETC deposits and withdrawals. As earlier reported by Crypto-News India, both the exchanges issued statements to that effect. Coinbase said, “On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain.”
On the other hand, Kraken said, “Ethereum Classic (ETC) funding has been disabled due to the ongoing 51% attack on the network. Funding will be resumed when the network’s health has stabilized. Trading continues, for now.”
In the meantime, Charlie Lee, founder of Litecoin weighed in with his comments saying, “By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources. If a crypto can’t be 51% attacked, it is permissioned and centralized.”
This is a thought-provoking observation. 🤔
By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hashrate, stake, and/or other permissionlessly-acquirable resources.
If a crypto can't be 51% attacked, it is permissioned and centralized. https://t.co/LRCVj5F0O1
— Charlie Lee [LTC⚡] (@SatoshiLite) January 8, 2019
Tagging Coinbase’s tweet on the doublespend attack he had said, “Be careful w/ coins that are not dominant in their respective mining algorithm, especially ones that are NiceHash-able. ETC has less than 5% of the total Ethash hashrate and is 98% NiceHash-able. 1-hr attack costs $5k. Almost $500k has been double spent.”
While exchanges have battened their hatches and taken necessary precautions, it is important to note that, Ethereum Classic had denied any instance of such an attack taking place, despite evidence to the contrary. At the time, it had said, “There have been rumors of a possible chain reorganization or double spend attack.From what we can tell the ETC network is operating normally. BlockScout’s “Reorg” section shows nothing of the sort.”
However, a Chinese blockchain security firm SlowMist had said at the time that there might be possibility of such an attack. Earlier it was quoted as saying, “A Chinese blockchain security firm SlowMist sent out an alert that the Ethereum Classic (ETC) network might have been targeted by a 51% attack, though without specifying many details. The price of ETC was whopped right away by the alert, which fanned a new round of FUD. The alert was later further consolidated by another post by a netizen, who went by with the name of Egg Knight. The netizen supplemented the alert with a finding that many blocks were underway transaction rollbacks. The post was liked by the founder of the initial scout SlowMist.”
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