While some miners are attacking Ethereum Classic, the spin-off blockchain based on the consensus and protocols of the original Ethereum blockchain continues to gain support.
After miner Chandler Guo announced he and other miners plan to attack Ethereum Classic Tuesday, Bill Shihara, CEO of Bittrex, a cryptocurrency exchange, contacted CCN.com express his skepticism about the miners’ attacks.
Guo said he, assisted by other miners, will 51% attack Ethereum Classic as soon as possible.
Guo said that they would isolate any block so that transactions cannot be confirmed, which was necessary because of the decision by the Poloniex exchange to add Ethereum Classic.
Poloniex shocked many in the community Tuesday by listing Ethereum Classic.
Some considered Poloniex’s action to be reckless, saying ETHC’s chain can be double spent and become dysfunctional. Poloniex’s critics believe the exchange could give legitimacy to ETHC that would prove flawed, causing ETHC holders to lose money.
Shihara believes ETHC hashpower is already at the point where it will take much more than one mining pool to 51% attack it. He noted the threat of the attack was supposed to discourage the adoption of more than one fork.
The replay attack is an ongoing concern for both forks, Shihara said.
Customers could be inadvertently losing either ETHC or ETH if they are not careful, he said. He encourages users to split their coins before transferring them anywhere.
If, for instance, a wallet had 100 ETH before the hard fork, the ETHC blockchain also credits 100 ETHC on the wallet address.
This makes the owner think they have twice as many coins from doing nothing. The owner then goes through the process of getting another wallet using the ETHC blockchain to transfer it to an exchange like Bittrex to sell it.
But when they transfer 10 ETHC to their ETHC address on Bittrex (or Poloniex, which has the wallet up), the transfer is replayed on the ETH blockchain. They will also have 10 ETH transferred on the ETH chain to some address that hopefully Bittrex controls. One can easily lose 10 ETH which is worth about 20 times ETHC.
Nonetheless, Shihara is not surprised that some exchanges are supporting Ethereum Classic.
“I think this is a case of user demand and ease of integration,” he said. “Clearly, there is a market for Classic trading. Multiple exchanges predicted this in advance of the fork and cautioned the Ethereum Foundation to take steps to support the original chain.”
“The technical complexity was also lower as most exchanges already supported Ethereum pre-fork,” he added. “The delay at Bittrex was to ensure that token transfers were secure despite the ongoing replay attacks.”
“I can’t speculate on every ETC holder’s motives, but I do know that the open source nature of digital currencies allow communities to gather and support new philosophies on existing code bases,” Shihara said.
“The customers I’ve personally spoken to have a range of reasons, from philosophically opposing the bailout, wanting additional volatility in Ethereum prices, or just supporting David versus the Ethereum Foundation’s Goliath.”
In the short term, ETC and ETHC prices are tied together, he said.
In the long term, I think their influence on each other diminishes. The longer each fork exists, the more their missions are defined and niches established.
Shihara advises developer working on new applications on the Ethereum blockchain to carefully consider whether or not their application is impacted by the replay attack and whether they want to support both chains.
“There are some simple steps to protect yourself in the smart contract framework using functions similar to what was done with the split contracts,” he said. “Some companies like Digix Global have declared their support for only one chain since they have a tradable asset that is backed by gold.”
“The Ethereum Foundation could have mitigated the attack with their hard fork and chose not to,” Shihara noted. “Blockchains have the ability to prevent transactions from being valid on the pre- and post-fork chains. One way on Ethereum is to change the ‘Ruleset.’ It is already used in the code to separate testnet from mainnet.”
“I think the project is viable due to the following they’ve generated,” Shihara said of Ethereum Classic.
Last modified: March 4, 2021 4:50 PM