Ethereum Classic hit by another 51% attack

Ethereum Classic (ETC) has suffered another 51% attack on Thursday, August 6, where over 4,000 blocks were reorganized. The news was first revealed by Bitfly, a mining operator, and Binance exchange on their respective Twitter handles. Bitfly was quick to halt ETC payouts to miners while Binance’s system automatically halted withdrawals and deposits of the estranged coin.

Moments later, Ethereum Classic tweeted urging exchanges, mining pools, and all ETC service providers to raise confirmation times significantly on incoming deposits and transactions. The reorganized blocks following this attack have become the longest chain ever witnessed on the network. During last week’s attack, 3,693 blocks were reorganized.

Vitalik Buterin, the founder of Ethereum, in a comment about the latest attack, suggested,

‘ETC should just switch to proof of stake. Even given its risk-averse culture, at this point making the jump seems lower-risk than not making it.’

Weak blockchain

The fresh attack comes in the wake of a similar attack that was executed between 29^th July and 1^st August, which was blamed on a technical glitch. However, an analysis published by blockchain forensics firm, Bitquery, revealed that the hacker systematically spent 17.5 BTC on purchase of hash power to double pay 800,000 ETC whose value was $5.6 million at the time. The report concludes that the attacker had an in-depth knowledge of the ETC network architecture to manage such an exploit.

At the moment, it’s not clear the exact amount that the hacker has managed to get away with. However, quick approximates show that the attacker may have received $93,760 in mining rewards alone using the current rate of $23.44 for each block on the ETC network. Following the attack, the price of ETC hasn’t changed significantly and continues to swing.

Impact of a 51% attack on cryptocurrencies

A 51% attack occurs when a hacker compromises a given blockchain and controls over half of the network’s hash rate resulting in double-spending. While 51% attacks may occur due to a poor internet connection, the majority are malicious and well-orchestrated. Such an attack is troubling for the cryptocurrency space, especially since it can go for hours or days without being discovered. However, the distributed nature of blockchain and the zealous crypto watchers provide hope that such an attack wouldn’t go long without being detected.