Ethereum Classic price drops after suspected 51% attack

Ethereum Classic has become the latest victim to a 51% attack on its network. Coinbase was one of the first exchanges to spot this on January 5th and it published a blog confirming that it detected a deep chain reorganisation of the Ethereum Classic (ETC) blockchain which included a double spend. Worryingly, Coinbase noted that the double spends totaled 219,500 ETC ($1.1 milliion). The price of ETC dropped after the reports and the altcoin is currently trading close to $5, down 5.18% in 24 hours. 

Ethereum Classic did not deny the possibility of double spends, but also added that the situation could have been caused because of ‘selfish mining‘ by mining device manufacturing company Linzhi testing new ASIC devices. It also asked exchanges and mining pools to increase block confirmation rates (above 400) to avoid issues.

ETC tweeted:
To be clear we are making no attempt to hide or downplay recent events. Facts are facts and as the situation develops we’ll soon get a full picture of what actually took place. Linzhi is testing ASICS. Coinbase reported double spends; both may be true. In time we will see.

51% attacks occur when a single entity holds 51% or more hash power within a network. This allows the entity to alter the blockchain, essentially allowing double spends and reap profits in an unfair manner. Most Proof-of-Work Coins are vulnerable to such attacks. The attack on Ethereum Classic should worry investors because it is among the top 20 coins by marketcap. Last year, prominent cryptocurrencies Verge and ZenCash were also subject to 51% attacks.

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