Ethereum Classic is among some of the most popular cryptocurrencies in the markets. The currency came into limelight last year, following its listing on Coinbase. It is now being reported that $460,000 worth of ETC cryptocurrencies have been stolen following a 51% attack on its blockchain platform. Following this attack, Coinbase has halted the trading of Ethereum Classic.
A 51% attack allows the attackers to reorganize the blockchain platform. The attackers were able to change the code of the Ethereum Classic blockchain and were able to double-spend 88,500 ETC currencies. Basically, in this kind of an attack, the attacker was able to recover spent coins and transfer them to his ETC wallet address. The technical name of such kind of an attack is a rollback attack.
This attack is called the 51% attack because this requires the attackers to gain a majority stake in the processing power of the blockchain. By executing a rollback attack, attackers basically generate a fork of the original blockchain and replace the original blockchain with this newly created fork. The attackers can use this newly created fork to rewrite the existing transactions on the original chain.
Coinbase security engineer, Mark Nesbitt provided the details of this attack on the Coinbase Blog, saying:
On 1/5/2019, Coinbase detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused interactions with the ETC blockchain. Subsequent to this event, we detected 8 additional reorganizations that included double spends, totaling 88,500 ETC (~$460,000). Update: Subsequent to this event, we detected 12 additional reorganizations that included double spends, totaling 219,500 ETC (~$1.1M).
In addition to Coinbase, another popular cryptocurrency exchange, Kraken, has also announced halting of Ethereum Classic transactions till the issue is resolved. Ethereum Classic officials have also confirmed that their blockchain is under attack - however, they have not come to a definite solution to this problem as of this writing.
Effect on Ethereum Classic (ETC) Price Performance
A loss close to $500,000 is a major one - and it is bound to have an impact on the functioning of the Ethereum Classic blockchain network. The currency (ETC) started the day at $5.26 and dropped to the day’s low of $4.93: a drop 6.27%. However, it closed the day at a price of $4.97. The market cap of Ethereum Classic was also affected as it dropped from $56.5 Million USD to $52.9 Million USD.
This reverses the trend for Ethereum Classic. Over the past 24 hours, it has been noticed that the cryptocurrency markets at large are green and most cryptocurrencies are on a bullish momentum. It will be interesting to see how this hack affects the growth of Ethereum Classic in the long run. Stay tuned with us at Cryptoground for all the latest updates and news stories from the world of cryptocurrencies and the blockchain technology.