Ethereum Classic (ETC) Attacks Affect Gate.IO with Double-Spending
The Ethereum Classic network is still easily attackable by hired hashing power, and exchanges bear the losses incurred by attempts to profit from double-spending.
The Ethereum Classic (ETC) attacks that started last Sunday may be causing further losses, with another double-spend noticed by the Gate.IO exchange. Another transfer of 54,200 ETC raised the internal balance, allowing the hacker to sell without depositing actual coins in the exchange wallet by rolling back the transaction:
ETC losses were estimated at around $1 million by Coinbase, which first noticed the attacks last weekend. It turns out Gate.IO was also affected on January 7. Initially, the exchange managed to weed out dubious transactions, but some of the double-spends looked valid and were accepted by the system.
“Gate.io has raised the ETC confirmation number to 500 and launched a new strict 51% detect for enhanced protection. However, we suggest the ETC dev team and the community build a new consensus mechanism (PoS for example) to better protect ETC network from 51% attack,” the exchange team explained in a detailed report of the exploit.
In recent days, there has been a curious development around the Ethereum Classic network. During the times of the attack, it had a 116% score on the potential for buying Nicehash mining power. Gradually, the index slid to 105% and then to 96%, suggesting that the hired hashrate firm may, in fact, be shutting down the available power to prevent new attacks. However, it is unknown how much Ethash power the attacker has and where the mining originated.
Interestingly, the ETC market price remains largely unaffected by the attacks, hovering around $5.06. This suggests that traders may not be all that concerned with the qualities and parameters of a blockchain as long as the asset is liquid.
One of the reasons is that the loss is relatively small, even after the complete attack. Currently, there are no reports of a potential ETC delisting since the coin is still viewed as a reasonably safe asset.