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Why is RollBack of Over 4000 Blocks on ETC Created Storm in Crypto Industry?

Highlights

    ETC faced a huge 51 percent attack, second in a week.

    More than 4000 blocks were reorganized

    In this attack, over 800,000 ETC (worth about $5.6 million) was double spent

ETC suffers another 51% Attack in Five Days

We trust blockchain because one cannot alter any transaction once entered. Well, what happens if it gets reversed? However, in the early hours of Thursday, the exchanges Bitfly and Binance reported a fresh attack on ETC, reorganizing more than 4000 blocks on the blockchain network. Both the platforms halted the withdrawals and deposits. 

The transactions or the blocks on the blockchain cannot be reverted, once successfully completed. However, the reorganization occurs when a person or a group gains more hash power than the rest of the miners on the network. Further, the blockchain’s history can be rewritten and also spend two times the currency which is ETC in this attack. 

What’s surprising here is that ETC developers deny the fact that ‘network suffered 51% attack previously, on the other hand, Bitquery, a blockchain data intelligence firm claims that the attack resulted in approximately $5 million worth of cryptocurrency being double-spent. This is approximately over 800,000 ETC and attackers were successfully able to acquire hash power for the attack by paying only 17.5 BTC ($204000).  

ETC Attack becomes the Talk of the Town

As the first attack surfaced between July 29 and August 1, ETC became a more popular topic for debate in the crypto space. Much before the fresh attack, Adam Back, CEO and Co-founder of blockstream.com included Ethereum, Cardano, Ripple, and other tokens in a list of scam coins including Bitconnect and said ETH is similar to Ponzi schemes.

However, he received more criticism from many crypto followers including ETH founder Vitalik Buterin. He said that Adam is trying to push the old propaganda, calling ETH a Ponzi scheme. However, this is losing its effectiveness as ETH is surging with the rise in PoS. CZ, CEO of Binance also responded that in the decentralized space, different people have different opinions. 

Also know – Why will Ethereum Hit $1000 Before Bitcoin Breaks $20K?

What’s more, Vitalik advised ETC to switch on the PoS from PoW, with minimum risk.

However, ahead of the attack itself, Binance Boss ‘CZ’ stated that blockchains are not immutable. He adds that;

Nothing is 100% secure. Better to be transparent about these risks than hiding it, or tabooing talks about it. Education is the best protection”

As CZ noted, it’s worth remembering that the Blockchain’s 51% attack is a part of the design. In fact, it is susceptible to a 51% attack and the latest attack on the ETC network is the second attack in a row in just five days. It said that to gain authority over the majority of the ETC’s hash power, he rented hash power from Nicehash provider ‘daggerhashimoto’. He was able to mine 4280 blocks within four days and then sent ETC to a wallet under its control. 

Impact of 51% Attack on the ETC price?

The hash power on ETC has decreased by nearly 20 percent from 1.6 THs to 1.3THs since 03 August 2020. After the first attack, the ETC price fell miserably within an hour, from $8.18 at 9.30 pm to $7.16 in the next hour.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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