January 09, 2019 | AtoZ Markets - According to the recent reports, Ethereum Classic, a by-product of the second most popular cryptocurrency in the world, experienced a series of serious attacks on its blockchain network.
1.5MLN Ethereum Classic hacked after 51% attack
According to the Ethereum Classic community, hackers had stolen over $ 1.5 million funds. The blockchain experts assumed that it was a so-called 51% attack on the technology underlying Ethereum Classic. Earlier, Atoz Markets reported that on the background of what happened, the popular cryptocurrency exchange Coinbase was forced to stop trading with Ethereum Classic.
As Coinbase reported on its blog, "hackers have raised over $ 1.5 million as a result of double spending." In their statement addressed to the users, one of the biggest global crypto exchanges explained that they discovered a deep reorganization of the Ethereum Classic blocks, "which included double costs."
Coinbase officials added that they immediately "suspended interaction with the ETC blockchain to protect customers' funds." After this event, the company continued, additional reorganizations that included double costs which were discovered. Coinbase reported that they will continue to monitor the "state of the network."
Difficulty of a 51 Percent Attack
As mentioned earlier, a 51% attack is hypothetically possible for any cryptocurrency but is also very difficult to implement. To perform such hack, it is necessary to control more than half of the computing power of the mining network, which is used both to generate new cryptocurrency units and to confirm transactions in the network. Such scheme gives access to “double spending”. This is the process by which anyone who controls the network can spend cryptocurrency units twice. The creator of Bitcoin who calls himself Satoshi Nakamoto first described this type of attack in his official document in 2008. The document says: “If most of the processing power is controlled by honest nodes, an honest chain will grow the fastest and outpace any competing chains.”
How Hack Incidents Impact the Price of Crypto?
Ethereum classic is currently rated at CoinMarketCap as the 18th most significant cryptocurrency. However, according to the cryptocurrency experts, the latest attack is likely to undermine the trust of traders in this digital asset.The previous hack incidents involving cryptocurrencies had a negative impact on their value.
For example, Bitcoin Gold value decreased after the similar 51% attack. According to the experts with 51% attack, coins gets high-jacked from those exchanges that confirmation time is too low similar thing can be expected for Bitcoin Cash too.
Some technology giants are taking steps to prevent such incidents. The giant search engine Google confirmed in their blog that the Chrome extension containing “tangled” code which complicates the process of checking extensions for approval will no longer be allowed. According to the experts it will help to avoid another kind of the hack attacks, when crypto jackers use malware installed on their victim's computer for mining or stealing their cryptocurrency.
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