Ethereum Classic (ETC) has seen 12 chain re-writings within the past 2-3 days, 8 of them going as far back as 75 blocks.
A number of these history revisions contained double spending. According to Coinbase, 219,500 ETC, worth $1.1 million, were double spent through a 51% attack.
“Late on the evening of Saturday 1/5, our systems alerted us to a deep reorg in ETC that contained a double spend. Our on-call engineers responded to the alert and worked to confirm the report through the night.
We determined that we would temporarily halt send/receive interaction with the ETC blockchain in order to safeguard customer funds,” Coinbase said.
The above has been confirmed by others, with the perpetrator remaining unknown. Just as it is unknown whether the double spends were actually successful or who was at the receiving end of it. Coinbase and Poloniex have stated they were unaffected.
“There’s been 8 that are >75 blocks. The hashrate doesn’t appear to have come from ETH miners nor Nicehash, appeared out of nowhere. Potentially new ASICs,” Anthony Lusardi, director at ETC Cooperative, said.
There are suggestions that there was a huge spike in demand for hashing power on Nicehash at the time of the attack.
Apparently only 10 terahashes per second (TH/s) was sufficient. Ethereum currently has about 200 TH/s. Its all-time high was 300 TH/s. Some 100 terahashes, therefore, are laying around.
As such asics would have not been necessary and if someone had developed such asics then the most stupid thing they could do would be to 51% attack the network for which they just spent so much money to develop specialized hardware. Hardware that after that point might become useless.
That feeds into a currently ongoing debate in ethereum regarding a potential Proof of Work (PoW) change through ProgPoW to make asics mining inefficient compared to gpu mining.
The question there being whether such change would be picking winners and losers and whether asics provide greater security as bitcoiners thought when they first appeared. They argued so because you can easily hire gpus from some farm, but you need to manufacture the specialized asics.
Proof of Work, however, is generally flawed because it tends to concentrate new supply into the hands of very few. It is one of the best method to distribute new coins initially, but its continued use to secure the network has challenges.
That’s why eth devs are hard at work to get Proof of Stake (PoS) out, but the PoW chain will continue to operate for quite some time in parallel. That will be at a reduced level of significance due to what can be called as decentralized checkpoints by stakers which may launch sometime this year.
ETC’s price has hardly been affected by the 51% attack at the time of writing. It did drop circa 10%, but it looks like it has recovered a bit for now.
The coin is tiny with hardly much of a community or developers. What developer team there was could no longer sustain itself.
There are apparently some other teams, but the fact Coinbase knew of this 51% attack since the 5th of January and no ETC dev did know or state so, might suggest the chain isn’t being maintained.
The situation for a big network like ETH or BTC would be very different as it would cost a lot to 51% attack and any such attempt would be instantly noticed with measures then taken to resolve the situation within hours.
That may well suggest that in a PoW situation minority split-coins, or any coin that shares hardware with a top coin, are in a vulnerable position.
That has been known since Luke-Jr attacked some tiny coin in 2011-12 to show the vulnerability of shared hardware.
A chain-split coin or a new coin, therefore, should also come with a new algo that is not shared with other top cryptos. That has its own challenges, from whether the algo has a safe design to whether the community would be sufficiently big to make 51% attacks not worth it due to high costs.
What ETC will do now remains to be seen, but as Emin Gun Sirer said, the main point of this coin was immutability at all costs. ETC is now no longer immutable.