Coinbase suspended Ethereum Classic (ETC) after attacks worth $1.1 Million
Coinbase.com, a mainstream cryptocurrency exchange, disclosed an abnormal 12 double spend in the Ethereum Classic, which prompted them to halt the transaction of ETC blockchain. These 15 reorganizations in aggregate cost around $1.1 million worth of Ethereum Classic (219,500 ETC) transactions. Also known as the 51% attack, where an individual is successful in producing enough mining power (as much as 60%) to be the majority miner of Ethereum Classic, enabling him to establish double spend.
“With both the hash power securing Ethereum Classic and the market cap of its token supply being less than 1/20th that of the Ethereum main chain, it’s not particularly surprising that Classic was successfully 51% attacked. If and when Bitcoin and Ethereum are 51% attacked, the distributed ledger community at large should consider a deep re-evaluation of proof-of-work’s security profile. However, coordinating attacks on those larger, cornerstone networks would be orders of magnitude more difficult,” explained Nir Kabessa, Columbia University’s Blockchain President.
The trade stoppage continued until the next day, January 6 since as per Coinbase was “due to unstable network conditions on the Ethereum Classic network, we have temporarily disabled all sends and receives for ETC. Buy and sell is not impacted. All other systems are operating normally.”
Coinbase still detects double spend activities in ETC till evening of January 6, Sunday. The cryptocurrency exchange has clarified that they were not targeted by malicious personalities, the coinbase system was not directly or indirectly attacked for the entire duration of the double spend. Experts in cryptocurrency, like Mati Greenspan, eToro’s Sr. Market Analyst is trying to normalize the issue stating that being a minor cryptocurrency, the ETC double spend issue is an isolated case which cannot be easily duplicated with a major cryptocurrency like Bitcoins.
“Putting things into perspective, if someone is dreaming about trying to 51% attack Bitcoin, they would need about 4,500 times the amount of hash than they do to attack ETC. So, anyone claiming crypto is in a state of emergency is dead wrong on this one. Simply put, this is yet another great example of how negative news is nothing more than a learning opportunity. All the newcomers that joined crypto in 2017 should be much more comfortable now with how blockchain and crypto works and that is ultimately a good thing,” said Greenspan.
However, this issue brings up the discussion of mining monopoly, especially with minor cryptocurrency into the mainstream. Those who want to deal with cryptocurrency, especially speculative trading needs to fully understand the risks they are willing to take. Cryptocurrencies are not supported by any government monetary policies, it bypasses the need for a central bank which is heaven sent for use with money laundering and funding many illegal activities. The traders need to be fully aware of the advantages and disadvantages of choosing to trade a specific cryptocurrency.
Do not leave anything to chance. It is well known that an error in the direction of transfer of a virtual currency can cause a serious problem of loss of money. Regarding Ethereum, we must be very careful when copying the digits of the transfer address, otherwise, the money will not arrive or a much larger amount will be transferred to the desired one.
Julia Sowells950 Posts
Julia Sowells has been a technology and security professional. For a decade of experience in technology, she has worked on dozens of large-scale enterprise security projects, and even writing technical articles and has worked as a technical editor for Rural Press Magazine. She now lives and works in New York, where she maintains her own consulting firm with her role as security consultant while continuing to write for Hacker Combat in her limited spare time.