So whether the threat of 51% attack, really? Of course, all this sounds scary, but in reality the price of a cryptocurrency is not so dependent on them. Let’s try to understand how it all works.
One of the biggest altcoins by market capitalization Ethereum Classic not so long ago, suffered the attack 51 percent. In this case, one of the mining groups had acquired control over most of Hasrat network ETC and made several attacks double spending on various exchanges, including Bitrue, Gate.io, as well as one of the biggest is Coinbase.
The Coinbase team said in a tweet that the exchange recorded the attack on 5 January and has temporarily suspended the movement of funds.
On 1/5/2019, Coinbase chain detected a deep reorganization of the blockchain Ethereum Classic that included a double spend. In order to protect customer funds, we immediately paused movements of these funds on the blockchain ETC. Read more here: https://t.co/vCx89dz44m
— Coinbase (@coinbase) January 7, 2019
However, the company on the security of blockchain systems SlowMist said that the attack, no one noticed until the infliction of the direct damage on 7 January. It was then that the team SlowMist warned Coinbase and network ETC. Later this statement was confirmed by representatives from Ethereum Classic.
“Chinese blockchain security firm SlowMist sent out an alert that the Ethereum Classic (ETC) network might have been targeted by a 51% attack.”
Exclusive: One $ETC Private Pool Claimed over 51% of Network Hashrate Is Reported via @SlowMist_Team https://t.co/Bshi6OWCaJ
— Ethereum Classic (@eth_classic) January 7, 2019
Coinbase took most of the damage – by attack double-spend attackers stole 219,5 thousand ETC, which at the time was equivalent to $ 1.1 million. Not a very pleasant situation for Coinbase. But then for the chaos that has occurred in the network ETC?
In fact, no chaos was not.
Exchange – the real victims of the attack 51%
Just a few days after the attack the network ETC worked properly. The coin, though, and clumsily, took the blow, quickly recovered and is now trading at 4.08 USD. ETC still ranks in the top twenty currencies on Coinmarketcap.
According to blockchain analyst and associate-London Kings College Patrick Mccorry, ETC were able to recover in just a day. This suggests that the 51% attack can certainly happen, but traders are not too worried.
Fun fact about the 100-block reorg in Ethereum Classic.
None of the traders care about it. Look at the price — it took “a bit of a hit”, but its mostly recovered in a day.
Great lesson — you can attack a coin, perform a double-spend, and most traders won’t care. pic.twitter.com/j6mUcCSV37
— Patrick McCorry ☘ amazing game (@paddykcl) January 8, 2019
CoinShares chief strategist and industry expert Meltem Demirors also said that the price of ETC is less sensitive to news. Moreover, the relatively small community around the project made it possible to neutralize the effects of the attack.
However, although Ethereum Classic is touched not so much, stock exchanges still suffered. Thus, real victims and hostages of the situation are the exchange, and not the coins. Though, because they have no chance to count on the damages.
Cryptocurrency researcher Hasu wrote on Twitter that the most frightening attacks in cryptocracy by and large suffer only exchange.
Exchanges are the primary victim of 51% attacks. Exchanges don’t list cryptocurrencies for their immutability, but to make money and apparently, the R/R pays off for them. It’s *extremely* hard for a 51% attacker to target users who actually value immutability. https://t.co/iOkBki3HJz
— Hasu (@hasufl) January 9, 2019
Exchange – the main victims of the attack 51 percent. They listed cryptocurrencies not for their immutable nature, and for profit. Apparently, they halloo to one another. The initiator of the attack 51 percent will be extremely difficult to touch users that really appreciate the resistance.
The 51 percent attack Bitcoin is still unlikely
Fortunately, exchanges, traders and networks, the attack 51 percent on the largest cryptocurrency in the world is almost impossible. Of course, exclude the probability is impossible, but the facts show that the costs of carrying out the attack on Bitcoin far exceed the potential benefits. The equipment alone to attack would have cost the attackers in the billions of dollars.
So exchanges like Coinbase can breathe a sigh of relief if we are talking about BTC. However, the case of Ethereum Classic showed that should provide protection against attack double-spend in case of 51% attack on a less powerful network. Oh, and you should probably consider running their own node to verify transactions on the network. More data look at cryptodata.
Subscribe to our channel in the Telegram. And buy masternode!