Altcoins, Cryptocurrency

Third 51% Attack on Ethereum Classic launched by hackers This Month

August 31, 2020

Above estimated 7,000 blocks have been reorganized after August’s third Ethereum Classic 51% attack.

The protection strategy for the Ethereum Classic blockchain from 51% attacks might be too little, too late. In August, for the third time, hackers have gained control of the Ethereum Classic blockchain during a 51% attack that restructured over 7,000 blocks.

These attacks have raised concerns over the network’s security as Ethereum Classic developers are rushing to protect the blockchain from future attacks. For instance, OKEx has considered writing off the coin from the list to safeguard itself from further damages.

51% attack; what can it do?

To take over the blockchain, hackers conduct a 51% attack to it. Blockchains are the decentralized ledgers because they allocate all the work of authenticating dealings through a global network of computers, which are called miners.

A single dealing must be permitted by over 51% of miners. As mentioned in theory, it isn’t straightforward for one actor to control 51% of the network, since that would oblige an enormous amount of computational control.

Suppose someone can manage the control of the network. In that case, they’d be able to bend the blockchain to when they want to, credit their accounts with free cryptocurrency, for example, or even sidetrack other people’s transactions to their private people’s wallets.

But this is impossible to achieve, not so for Ethereum Classic the released version of the more popular Ethereum blockchain; which hackers exploited this month for three consecutive times.

Explaining the occurrence

Last night was the latest attack that took place. The hackers have managed once again to brute-force their way to mainly control over the network and managed to reorganize more than 7,000 blocks or about two days of mining.

The attack was identified by Austrian mining company Bitfly, which also identified the first and second attacks, wherein hackers reorganized almost 8,000 blocks and took home around $9m in double-spend transactions, much of it from crypto exchange OKEx.

Bitfly, an Austrian mining company has identified the attack; they also detected the first and second attacks this is where hackers updated practically 8,000 blocks and took home about $9M in double-spend dealings, much of this was from crypto exchange OKEx.

A non-profit company that watches over the Ethereum Classic blockchain, ETC cooperative said in a tweet recently that it is “aware of today’s attack and are working with others to test and evaluate proposed solutions as quickly as possible.”

Little is known about this latest attack.

There’s far less computational power backing Ethereum Classic than on greater blockchains, like Ethereum or Bitcoin, saying that it’s not so problematic to briefly rent enough computational power gain majority controller over the blockchain.

There are two planned drafts to change Ethereum Classic’s algorithm to make this even more problematic, but it has not been implanted yet.

Ever since the hack, Ethereum Classic’s token price has fallen by 1.68%, per data metrics site CoinMarketCap. But the longer-term damage may be more enormous. This coin’s listed as suffering from “degraded performance” for instance.

After the previous two attacks earlier this month, OKEx noted that it would “consider delisting ETC, pending the results of the Ethereum Classic community’s work to improve the security of its chain.” This is due to OKEx bore the brunt of the first attacks, and “suffered a loss of approximately $5.6 million in ETC” according to a statement last August 15.

“The loss was fully borne by OKEx, according to its user-protection policy, and did not cause any loss to the platform’s users. The ETC that users have deposited on OKEx remains safe,” it addressed after the previous attack.

Ethereum Classic designers must wad the exploit before OKEx creates its move.

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