On the night of the 7th of January, the official Ethereum Classic (ETC) team noticed something was off. They found that chain reorganization could have occurred and double spending attacks were currently ongoing. The first order of business was to turn to all Crypto exchanges and Ethereum Classic mining pools and ask them to require as many as 400 confirmations for ETC withdrawals and deposits.
There have been rumors of a possible chain reorganization or double spend attack.
From what we can tell the ETC network is operating normally.
— Ethereum Classic (@eth_classic) January 6, 2019
The team quickly came to the conclusion that everything is operating normally within the Ethereum Classic network. However, nothing is excluded and the situation is currently being investigated by the team. A chain reorganization occurs when a client in most Blockchain designs discovers a longer chain which disregards blocks it had previously processed. This is usually referred to as “the longest chain wins”. The longest chain is defined by many metrics including the difficulty.
The Ethereum Classic team acted quickly
51% Attacks are also based on the concept of the longest chain. If the miner has sufficient hash power, he can rewrite the Blockchain however he wants. Essentially, the miner can pay for all the goods, services and even other Digital Currencies and then change the Blockchain’s history so the transactions seemingly never happened.
Performing a 51% attack is often tied with high cost and insufficient payouts so that’s why the biggest Blockchains are never targeted. Bitcoin for instance has such a large network that it would be ridiculously expensive to even attempt such a feat. The Ethererium Classic Blockchain however, does not have the same hash power requirement as Bitcoin and Ethereum.
If we look at data, on January 8th Ethereum Classic had just 8.8 terrahash. If we compare that to Bitcoin, we’ll see the huge difference with over 39 million terrahash. If we look at these numbers, we can clearly see why Ethereum Classic would be an easier target than Bitcoin or Ethereum.
After the Ethereum Classic team inspected the blockchain, they tweeted out:
To all exchanges and mining pools please allow a significantly higher confirmation time on withdrawals and deposits (+400)
— Ethereum Classic (@eth_classic) January 7, 2019
They specifically requested that OKEx, the exchange where most of the ETC volume takes place, to take precautions. By increasing the number of required transactions, the likelihood of victimization also goes down. It takes way more hash power for each additional block an Ill-minded miner seeks to republish or erase from the Blockchain. If too much chaos arises, the only solution becomes a hard fork and the majority of the network then decides which chain will go forward.
The most recent example was BCH and the so called “hash war” which followed. Ethereum Classic itself comes from a hard fork which was due to an early bug in Ethereum. The well-known DAO Hack led some people from the Ethereum community to disagree with the hard fork decision and preserve to original chain, hence the name Ethereum Classic.
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