Gate.io Exchange To Cover Almost $200k Worth of Stolen ETC, After 51% Attack

Cryptoasset exchange Gate.io will cover $184,000 worth of stolen Ethereum Classic (40,000 ETC tokens), after a reported 51% attack on the ETC blockchain occurred days ago, the company said in a press release.

The US-based exchange, which has a daily trading volume of $94 million at the time of writing, said that it had detected seven “rollback” attacks on the chain. Gate have also identified three of the attackers’ addresses, and suggest other platforms should block transactions to and from the addresses.

The minimum number of confirmations to process ETC transactions on the exchange have been raised to 500 as a precaution. Gate also “[suggested to] the ETC dev team and the community build a new consensus mechanism ([Proof-of-Stake] for example).

The ETC community, however, is known to be definitively against adopting a PoS consensus algorithm, and consider a Proof-of-Work (PoW) algorithm one of their main selling points in contrast to Ethereum’s (ETH) planned switch to PoS.

The former business developer of now-defunct ETCDEV, Donald McIntyre, said as much only a couple of days ago in the wake of the attack, commenting that “I think ETC still has a unique positioning as a PoW + Turing-complete network with an active community with sound principles.”

Still a prominent player in the ETC community, he did however express interest in a change in ETC’s PoW algorithm:

With the above in mind I think the best path is to explore a mining algorithm change to put ETC in a unique, incompatible PoW niche. Even if that implies a tradeoff as miners will have less optionality to point their infrastructure to different chains depending on the profitability of the day.

ETC’s 51% Attack(?)

CryptoGlobe wrote this week that the widely reported attack may not, in fact, have been an attack - but rather, an operational test of new application-specific integrated-circuit (ASIC) miners built for ETC’s consensus algorithm. (ETC currently uses the Ethash algorithm, which is still used by Ethereum.)

Interestingly, however, a tweet by the @eth_classic Twitter account, which speculated on the nature of the “attack,” has since been deleted.

It seems now that the ETC community agrees that it was, in fact, an attack. The substance of a community conference call, a diagnosis of the attack and the community’s response, was posted only hours ago, again on McIntyre’s Medium blog - ominously entitled “Post Mortem Meeting.”

McIntyre claimed a total of 15 double spend attacks and “at least ETC 219,500 stolen.” His explanation of the attack was straightforward, saying there is no “root cause internally in the [ETC] system,” and by way of explanationa said that “ETC is still a relatively small PoW blockchain with a mining algorithm that is compatible with larger chains such as Ethereum so attackers can rent hash power on NiceHash to reorg the blockchain.”

He detailed a number of suggestions to strengthen ETC in the future against such attacks, including a change in the PoW algorithm, reorg protection, and higher confirmation times in general (between 2,500 and 5,000). He added finally that “we will not reorg the chain or revert the events on chain under any circumstance.”

Max Keiser: Bitcoin Dominates Altcoins in Cryptocurrency Debate

  • Keiser Report host Max Keiser claims that bitcoin continues to dominate altcoins and provide more investor security.
  • Keiser predicted bitcoin's market dominance and hash rate to reach 99 percent within the next five years. 

Max Keiser, host of the Keiser Report, claims that bitcoin has no cryptocurrency rivals and that most altcoins fail to live up to the standard set by BTC. 

Speaking in an appearance on London Real, Keiser dismissed the possibility of a new crypto-asset emerging and eating into bitcoin’s market dominance. 

He said, 

There’s no coin out there that can do what Bitcoin doesn’t do already or will be able to do shortly. What you’re buying with Bitcoin is security.

Keiser continued, arguing that hard forks of bitcoin such as bitcoin cash and SV lack security compared to the original BTC.

The avid bitcoin supporter also referred to several altcoins as being “pure exit scams,” intentionally designed to manipulate investors. 

He explained, 

They have huge ‘pre-mines’ that the founders are selling or dumping and making a lot of money. A lot of people are losing money, and they have no use case. So like a Ripple or an Ether, even, is an exit scam. It’s to be avoided. Those are the top coins.

Keiser predicted that bitcoin’s market share and hash power, sitting at 65% and 85% respectively, will continue to rise relative to the market. He claimed that within five years bitcoin will account for 99% of all cryptocurrency hashing power and market capitalization. 

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