Coinbase has detected a deep chain reorganization of Ethereum classic. According to the blog, on 1/5/2019, Coinbase discovered a deep chain reorganization of the Ethereum Classic blockchain that involved a double spend.
To shield client funds, they instantly halted flows of these funds on the ETC blockchain. Following this case, the Coinbase also discovered 8 extra reorganizations that involved double spends, figuring 88,500 ETC (~$460,000). An anonymous person basically rolled back and changed transactions on the network. In reply, some exchanges have stopped transactions in the crypto asset, while others are demanding deeper recognition times to dodge being gamed while concocting trades.
At the time of writing this, the current ETC network status reads
Due to unstable network conditions on the Ethereum Classic network, we have temporarily disabled all sends and receives for ETC. Buy and sell is not impacted. All other systems are operating normally
What is 51% Attack?
A 51% attack also known as a double-spend attack is an attack carried out by the miner or group of miners on a blockchain in which they try to spend their crypto’s on that blockchain twice. A chain reorganization becomes dangerous when a miner controls a huge number of coins and chooses to shape the system with a wicked purpose.
In other words, 51% attack points to an attack on a blockchain – normally bitcoin’s, for which such an initiative is still theoretical – by an organization of miners managing more than 50% of the network’s mining hashrate, or energy. The criminals would be equipped to stop new transactions from obtaining recognition, enabling them to stop debts between any or all users. They would also be capable to transpose deals that were finished while they were in power of the network, indicating they could double-spend coins.
So, what exactly happened?
Mark Nesbitt, a security engineer unveiled that Ethereum Classic’s Proof of Work system, which operates on the ETHash algorithm, had befallen offering to “repeated” block “reorgs,” implying that an anonymous intruder [group] led to modify blockchain transactions frequently in current memory.
The Coinbase team is currently assessing the security of re-enabling sends and receives of Ethereum. The first common ancestor they found was 7249343. Depth 57 / Length 74. This was a transaction of value 600 ETC in orphaned block 7249357 was double spent by a transaction in attacker block 7249361**. After this event, the company detected 8 additional reorganizations that included double spends, totaling 88,500 ETC (~$460,000).
Ethereum Classic (ETC) Developers decline 51% Attack, Double Spend
Meanwhile, the developers for the ETC token have denied that the blockchain suffered a 51%attack. The developers said that a mining pool was guilty for any of the unusual course, having considered for more than 50 percent of the network’s hash rate and attacking in “selfish mining.” According to the official ETC Twitter account, the developers dispute that ASIC producer Linzhi was in the method of examining new ethash devices, producing a >50 percent network hash rate as objected to being a right effort at a 51% hack. The tweet also states that “double spends [were] not detected,” denying any the parts in the Coinbase report.
Regarding the recent mining events. We may have an idea of where the hashrate came from. ASIC manufacturer Linzhi confirmed testing of new 1,400/Mh ethash machines #projectLavaSnow – Most likely selfish mining (Not 51% attack) – Double spends not detected (Miner dumped bocks)
Notwithstanding the reply by Ethereum Classic community, Coinbase has not recommenced retreat and securities on ETC, rather preferring to observe the coin for movement advancing ahead. Despite showing out that the reorganizations directed to double spends amounting to the $450,000, the exchange contests that it was “not the target of this double spend and no funds were lost,” giving some extension with the comments stated by the ETC team.
The ETC team further said that that they are not trying to hide or downplay current developments. Facts are facts and as the position improves they will soon get a full understanding of what really took place. Linzhi is examining ASICS and Coinbase published double spends; both may be correct.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The crypto market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.