Ethereum Classic (ETC), the smaller spinoff of Ethereum, is still reeling from the 51% attack that was carried out on its blockchain, resulting in the theft of more than $1 million in ETC tokens and an almost 10% erosion of the cryptocurrency’s value.
Reactions to this attack have been pouring in from various quarters, including the temporary ban placed on various activities involving ETC by major cryptocurrency exchange platforms such as Coinbase and Kraken. Industry experts and institutions have also weighed in on the matter, how this incident could affect the public perception and adoption of blockchains, and how incidents like this can be prevented in the future.
In an email conversation with Bloomberg, venture capitalist Kyle Samani claimed that the success of the attack on the blockchain demonstrates that the Ethereum Classic blockchain has essentially failed at one of its most basic responsibilities as a decentralized cryptocurrency network.
I’m surprised that ETC is not down 50 percent or more. The most probable explanation is that the biggest holders store their assets off-exchange, leaving them unable to transfer them back and sell.
However, Charlie Lee — the founder and developer of Litecoin — seems to believe that with this attack, the Ethereum Classic blockchain is only exhibiting one of the inherent characteristics of a blockchain. In a tweet earlier this week, Lee stated that every decentralized cryptocurrency is susceptible to attacks of this nature, and any blockchain that demonstrates an immunity to this kind of attack is essentially centralized and permissionised.
“By definition, a decentralized cryptocurrency must be susceptible to 51% attacks whether by hash rate, stake, and/or other permissionlessly-acquirable resources,” the Litecoin creator wrote.
Lee’s sentiment was shared by Donald McIntyre, a member of the ETCDEV development team, which was shut down in December 2018 over lack of funding in the wake of the downturn in the crypto market. In a blog post published on Medium on January 8, McIntyre wrote:
Bear in mind that the current attacks ETC suffered are not a function of flawed internal design or a ‘hack’ to the system. It was a double-spend mining attack and a breach of security which is a formal assumption in its design, which is vulnerable to 51% attacks, as in any other proof of work blockchain, including Bitcoin.
In the post, McIntyre further claimed that the blockchain could be protected from attacks like this in the future through a change in the mining algorithm. At press time, ETC is ranked the 18th largest cryptocurrency by market capitalization and is trading at $5.04.
Charlie Lee Image from Slush 2018/YouTube
Last modified: August 2, 2020 11:05 AM UTC