Coinbase reveals that the classic Ethereum chain has been attacked
On Monday morning, Coinbase took its official Twitter page to reveal that on Saturday its internal developers detected a "deep reorganization of the chain" of the Ethereum Classic (ETC) blockchain.
On 1/5/2019, Coinbase noted a deep reorganization of the Ethereum Classic blockchain chain that included a double expense. In order to protect customer funds, we immediately suspended the movements of these funds on the ETC blockchain. Read more here: https://t.co/vCx89dz44m
– Coinbase (@coinbase) January 7, 2019
Mark Nesbitt, a security engineer at the renowned $ 8 billion startup, interrupted Coinbase's findings in a recent blog post. Nesbitt revealed that Ethereum Classic's Proof of Work system, which works with the ETHash algorithm, had fallen victim to "reorg" of "repeated" blocks, which means that an unnamed attacker [group] managed to change blockchain transactions repeatedly in recent memory.
For the data collected by the company, which has the task of monitoring the supported blockchains, approximately 88,500 ETCs have been spent twice, a sum that amounts to $ 450,000 at the time of the transaction. Quoting Minergate's data, Nesbitt broke every reorg one at a time, doing his best to find the entity of every single attack.
The first two attacks, which took place on Saturday, were quite harmless, since no double double charges were detected. Interestingly, the second attack was "highly suspect", but considering that no ETC has been spent twice, no red flags have been activated. Yet, while the third attack hit Sunday, Coinbase interrupted its "interaction with the ETC blockchain", since ETC has been doubly spent. Over the hundreds of blocks that followed, thousands of ETCs were doubled.
At present, Coinbase is the only leading cryptocurrency platform to have publicly commented on this situation.
The community reacts with skepticism
As this news spread to oil scrub, crypto-relevant personalities, analysts and researchers took their soapbox on Twitter to comment on this unfortunate situation. Charlie Lee, the creator of Litecoin, said that users should be careful with coins that are not dominant in their mining algorithm. Lee explained that Ethereum Classic has less than 5% of the cumulative hashrate of ETHash, which means that a NiceHash-based attack costs only $ 5k. To give a sum of $ 5k in a prospect, over several hours, over $ 450,000 have fallen into the pockets of the unnamed attackers, which means the attack was probably very profitable.
Pay attention to coins that are not dominant in their respective mining algorithms, especially those that are compatible with NiceHash. ETC has less than 5% of the total hashhrate of Ethash and is 98% of NiceHash. The 1 hour attack costs $ 5k. Almost $ 500k has been doubled. https://t.co/REwM2lFA9Z https://t.co/bqw54LUjke
– Charlie Lee [LTC⚡] (@SatoshiLite) January 7, 2019
Tim Swanson, one of the leading blockchain builders, took the opportunity to hit the PoC blockchains, noting that this form of consensus can not guarantee the purpose of the regulation, even if hundreds of blocks have passed.
this is one of the reasons why "the code is not law" because if mission-critical and / or long-dated resources are emitted and stored on an anarchist chain, the disruption of commercial activity could be devastating.
The chains of PoW, by design, can not guarantee the purpose of regulation. https://t.co/9oLI3YepRn
– Tim Swanson (@ofnumbers) January 7, 2019
Bitfly, the company behind Etherchain and Flypool, recently advised stakeholders to work closely with the chain and "significantly increase the required confirmations" [for deposits]".
ETC falls while news spreads
At the time of writing, ETC began to plummet, with its graph that looks a lot like a "falling knife". ETC is currently valued at $ 5.02 a token, with a 7.5% loss in the last 24 hours, as the rest of the crypto the market is relatively flat. If 51% historical attacks are any indicator (Verge, Bitcoin Gold, ZenCash, etc.), it is likely that the most important cryptocurrency could fall further. However, if the Ethereum Classic team and other entities involved in the ecosystem can stabilize the chain, ETC could recover over time.
This is a developing story, so Ethereum World News will be sure to keep you updated. Be sure to continue checking with us!
Title Image Courtesy of Luca Bravo Via Unsplash