Ethereum Classic (ETC) Network's Hashpower Consolidation May 'Not be 51% Attack', Developers Claim

Omar Faridi

Ethereum Classic’s (ETC) development team recently said that the mining pool which had claimed over 50% of the cryptocurrency network’s hashrate was “most likely selfish mining.”

ETC developers also noted that ASIC manufacturing firm Linzhi had “confirmed testing of [the] new 1,400/Mh ethash machines” and that “double spends [had] not [been] detected.” Commenting on the situation through an official blog post, San Francisco-based crypto exchange Coinbase wrote: 

[We have] detected a deep chain reorganization of the Ethereum Classic blockchain that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the ETC blockchain. Subsequent to this event, we detected 8 additional reorganizations that included double spends, totaling 88,500 ETC (~$460,000).

Coinbase also clarified that it was “not the target of this double spend and no [users’] funds were lost.”

May Take About $70 Million To Launch 51% Attack On Ethereum Classic

Chain reorganization occurs when a single miner or mining pool manages to acquire more resources than all other participants on the network. The dominant mining entity can then define a new transaction history on the targeted blockchain. This is can be done by “pick[ing] an arbitrary previous block from which to extend an alternative block history.”

In November 2018, Coinbase’s wallet service had introduced support for ETC, which allowed users to send and receive the cryptocurrency. The US-based exchange operator had first announced in June of last year that it would begin listing ETC, which led to a temporary spike in the digital asset’s value.

In May, Husam Abboud, a cryptocurrency and blockchain research analyst at Brazil’s FECAP University, had estimated that it may take “between 55 to 85 million [USD] (averaged $70 million)” to launch a 51% attack on the Ethereum Classic blockchain.

Leading Ethereum Classic Development Firm Shuts Down

As CryptoGlobe reported in early December 2018, the leading Ethereum Classic development team, ETCDEV was forced to shut down due to lack of funding. Igor Artamonov, the founder and chief technical officer at ETCDEV, had said that the company was unable to acquire capital to cover operational costs - mainly due to the extended crypto bear market.

According to Artamonov, ETCDEV’s management team had appealed to investment firms in the crypto industry and from other sectors in order to secure funding. However, the firm’s attempts were reportedly unsuccessful.

ETC currently has a market capitalization of about $533 million and is ranked 18th overall (out of all existing cryptocurrencies) in terms of market cap - according to CryptoCompare data. The ETC token is trading at around $4.97 at press time.