All About Ethereum Classic Hack

Posted On : 11 Aug 2020
Category : Blog
Hack on Ethereum Classic

According to industry sources, the popular cryptocurrency Ethereum classic was hacked in millions by hackers and the global cryptocurrency community is struggling to believe the reality. Ethereum classic is the smaller version of ETH which was hacked in a rare 51% cyber attack just a week ago. According to news reports, it was found that a single person was behind the attack and was able to control around 60% of the mining power helping create the longest blockchain ever which provided the hackers with the ability to double-spend the currencies.

However, the cybersecurity providers still do not have any clear idea of who is responsible behind the attack, and who has manipulated the majority of the CPU power in the mining pool is still not clear yet. The attack was reported last Thursday morning and is also confirmed by the crypto giants as well. As a result of the attack, many crypto giants such as Bitfly and Binance have ceased the ETC payouts, deposits, and withdrawals.

How the attack took place –

It is said that a 51% attack of a blockchain can only occur if a group of miners can establish 50% control over the blockchain network’s computing power. This way the hackers are free to prevent any new transaction by gaining confirmations, halting payments between traders, and reverse those transactions that have been already completed earlier. This states that they are able to double-spend the cryptos as they like or want.

According to a blockchain data company, in the last attack, which occurred on the 1st of August, nearly 807,260 ETCs that are worth over 5.6 million have already been double-spent. However, the value the attack that took place last week on Thursday is still not clear yet but will be updated after proper investigation.

Next steps that will be applicable on Ethereum Classic are –

In terms of vulnerability into PoW consensus algorithms, the blockchain network assumes that the mining nodes will be properly validated before confirming any transaction. The mining process is still evolving and there has been a rise and denomination of ASIC chips and the collection of hash powers will be done by massive groups of mining pools which will eventually share the rewards at the end of the process.

Changes in Ethereum Proof-of-work

The Ethereum developers have reached a tentative consensus in order to implement a new PoW algorithm, and this move is implemented to address the apparent division in efficiency between ASIC and GPU mining on the blockchain network. In the beginning, ASIC mining was incorporated to efficiently mine cryptocurrencies developed using specific algorithms. There are several changes on the horizon in terms of Ethereum mining and the core developers are working on making a detailed implementation of the ProgPoW. This will be happening in line with the motive of transitioning the entire proof-of-stake consensus system. However, even after such attacks, Ethereum will be moving ahead as the ETC developers are researching on their nest move to develop the most secure cryptocurrency. There are several smaller cryptocurrencies that are still using PoW algorithms and will continue to be at risk of being hacked and will be targeted by the hackers anyhow. There will be more development on the security front once the ETC developers and the blockchain community have gathered the extent of damage caused and the new way to move forward is considered the most important as of now.

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