What Does The Ethereum Classic Attack Say About The Ethereum Classic Community?


A few weeks ago, the Ethereum Classic (ETC) network suffered a 51% attack. The significant decline in the price of cryptocurrencies was one of the reasons why such an attack was possible. It made it easy for bad actors to take control of the network. They were able to seize money by initiating double spends. Yesterday, smarttest.wpmudev.host reported that the attacker returned $100,000 out of the stolen funds to the cryptocurrency exchange, Gate.io. After this, the cryptocurrency community started speculating that there is a possibility that the attacker was a white hat attacker whose intention was to pass a message rather than steal funds.


What We Learn From The Ethereum Classic 51% Network Attack


The security breach on the Ethereum Classic network is part of a wider problem. It is less about Ethereum Classic and more about the fundamental flaws of Bitcoin’s proof-of-work consensus algorithm. While Bitcoin was the first blockchain to implement the proof-of-work consensus algorithm, it is less vulnerable to a 51% attack because it has a large number of community members, miners and developers protect the network. Other less popular blockchains, Ethereum Classic for example, don’t have this privilege.


Ethereum Classic (ETC) Price Today – ETC / USD
NamePrice
bitcoin
Bitcoin
$7,357.86-0.63%
ethereum-classic
Ethereum Classic
$3.821.28%


The Ethereum Classic reorganization attack wasn’t the first to be recorded in cryptocurrency history. Such attacks have been launched on Bitcoin Gold and vertcoin in the passed. However, the attack suffered by Ethereum Classic was the largest of all three. True believers in Ethereum Classic were highly discouraged by the attack. These few are part of the minority who remained on the original Ethereum blockchain in 2016 when others left.


Dedicated to keeping the Ethereum network immutable after the DAO attack, these developers were sure that no group or individual will have the power to reverse transactions that have already been approved by the network. The 51% attack proved this theory wrong. On the other hand, the Ethereum blockchain, the forked version that broke out in 2016, is still immutable. There have been no reports of a 51% attack on the network till this day. While this doesn’t mean the Ethereum network cannot be attacked in the future, the chances of it happening are less than the chances of another 51% attack happening on Ethereum Classic.


The Significance Of Positive Feedback Loop

Launching a 51% attack on the Ethereum network would be way more expensive than launching one on the Ethereum Classic network. While hashing power and price are key factors that determine the vulnerability of the network, the positive feedback loop from a large community is what encourages network developers to keep working on the blockchain’s code.

Without ongoing development, a blockchain is left prone to network attacks.
Having a history of immutability is not a guarantee that a network will be free from attacks. The positive effect of the feedback loop from a strong community is what protects the network. The Ethereum Classic attacker has reminded the cryptocurrency community of this fact. A strong community births strong network security.


Ethereum Classic (ETC) Price Analysis


Like every other cryptocurrency, Ethereum Classic (ETC) lost a significant amount of its value in 2018. Right now, it is trading at $4.30. This means that it is green against the USD at 0.80% but red against Bitcoin at 1.52%. The trading volume over a 24 hour period is $103,644,649 and the market capitalization is $462,156,502.

Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.

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