Austrian cryptocurrency mining firm Bitfly identified another 51% percent attack on the Ethereum Classic blockchain last night, marking the third incident this month.
According to an initial report from Decrypt attackers managed to gain a controlling share of the Ethereum Classic (ETC) mining hashrate and used that to reorganize over 7000 blocks, which Bitfly equated to two days worth of mining.
The mining firm said that all lost blocks would be removed from the blockchain’s balance sheet and checks would be carried out for any dropped transactions.
It was also reported that perpetrators of the attack managed to make over $9mln from double spent transactions which were primarily made from cryptocurrency exchange OKEx.
As noted this is the third time the Ethereum Classic network has been compromised by a 51% attack. The developers maintaining the ETC network have been considering a number of improvement proposals to better protect the blockchain from hostile takeovers.
Tough year for ETC
The Ethereum Classic has now suffered a total of four 51% attacks in 2020. The 2015 hardfork of the world’s second biggest cryptocurrency Ethereum has long been vulnerable to these attacks.
A 51% attack is made possible when an entity or group of attackers is able to rent enough power to control more than half of the network’s hashrate. Attackers are then able to effectively control the blockchain and double spend holding and alter transactions.
When Ethereum Classic was forked from the ETH chain it lost a massive amount of hashrate support. This leaves the network vulnerable to these types of attacks, as it is far more accessible for attackers to rent enough computational power to take control of the blockchain ledger.
This is exactly what has happened and why the ETC blockchain developers are scrambling to find a solution that will better protect the network from these types of attacks. Cardano founder Charles Hoskinson has offered to help provide a solution which he believes will improve the security of the ETC blockchain. His proposal of a decentralized treasury has also been a divisive topic in the ETC community.
OKEx threatens to delist ETC
Cryptocurrency exchange OKEx has threatened to completely ETC trading support on its platform due to the amount of money lost from attacks.
Earlier in August Coindesk reported that the exchange had lost over $5mln in the ETC 51% attacks carried out in 2020. OKEx went as far as reimbursing clients who lost ETC during the attacks, effectively bearing the brunt of the attacks for its customers.
OKEx CEO Jay Hao lamented the fact that the exchange was having to bear the consequences of the network’s vulnerability.
“We know that it is impossible to prevent a 51% attack on any decentralized exchange, but we also do not want to foot the bill for ETC’s security vulnerabilities that have made it particularly susceptible to attack(s),” Hao told Coindesk.
The exchange has suggested that the large liquidity of ETC it offers on its platform is a major reason it has been used by the perpetrators of these ETC 51% attacks.