Ethereum Classic has experienced yet another malicious 51% attack—the second in under a week. Binance has frozen all Ethereum Classic deposits and withdrawals.
Reports have shown that a 51% attack on the Ethereum Classic blockchain reorganized 4,000 blocks on the chain. The attack was reported at around 3:30 AM UTC by Ethermine’s parent company Bitfly.
This is the second attack that Ethereum has faced this week. Reports show that between Jul 31 and Aug 1, over 807,000 ETC, worth $5.68 million, was stolen. Blockchain data intelligence firm Bitquery said that the attacker spent $192,000 worth of Bitcoin to obtain the network hashing power to execute the attack.
The Ethereum Classic team responded by asking related services like exchanges and mining pools to raise confirmation times.
In light of recent network attacks, it's recommended that all exchanges, mining pools, and other ETC service providers significantly raise confirmation times on all deposits and incoming transactions. @okex @binance @HuobiGlobal @hitbtc @coinbase @digifinex @etherchain_org
— Ethereum Classic (@eth_classic) August 6, 2020
The amount of stolen has yet to be confirmed, but it’s estimated that just under $94,000 in block rewards had been claimed. Binance has suspended all Ethereum Classic withdrawals and deposits as a result of the attack.
Ethereum Classic’s network hash rate and difficulty have dropped significantly in this time, with the former down by 18.65% and the latter down by 11.90%.
Ethereum Classic Can’t Catch a Break
The first of the recent attacks occurred between Jul 31 and Aug 1. It saw the attacker double-spend $5.6 million, as well as earn 13,000 ETC in mining rewards. The attacker mined nearly 4,300 blocks and stopped soon after the attack. This cost him or her 17.5 BTC, or $192,000.
The incident sparked a conversation about the security of the network, which today’s attack will only fuel further.
BitQuery said that the attack was sophisticated, and required a deep understanding of the Ethereum Classic architecture. The attack went unnoticed for several days before it was fully uncovered.
Vitalik Weighs In
Vitalik Buterin suggested that ETC switch to Proof-of-Stake (PoS), saying that it is of lower risk than Proof-of-Work (PoW):
ETC should just switch to proof of stake. Even given its risk-averse culture, at this point making the jump seems lower-risk than not making it.
— vitalik.eth (@VitalikButerin) August 6, 2020
In June 2019, ETC had undergone a hard fork to reduce block mining times. Reportedly, this was done to give network participants more time to choose a long-term consensus algorithm.
Ethereum (ETH) is preparing itself for a PoS transition with its highly-anticipated ETH 2.0 upgrade. The next generation of Ethereum aims to bring greater scalability and a PoS protocol to facilitate large-scale use of the network.