Ethereum Classic targeted in attack costing nearly $1.1M

Ethereum Classic Network targeted in 51% attack
Ethereum Classic Network targeted in 51% attack (Credit: Reuters/Dado Ruvic)

Ethereum Classic Network targeted in 51% attack
Ethereum Classic targeted in 51% attack targeted in 51% attack (Credit: Reuters/Dado Ruvic)

Almost $1.1M worth of the Ethereum Classic digital currency has been stolen in an attack on the Ethereum Classic Network.

According to a report by ARS Technica, the attack was carried out by means of a compute-intensive hack that rewrote its blockchain, said officials with Coinbase, one of the leading cryptocurrency exchanges.

This kind of attack is known as a rollback attack, often also referred to as a 51-percent attack, allowing attackers to reorganise the Ethereum blockchain. One could also say that a rollback attack generates a new fork of the blockchain. In theory, these attacks require an attacker to control a majority of the CPU power generating a blockchain, which violates a core requirement of any blockchain-based currency in that it allows a single entity to write the contents of its universal, shared transaction history. This is according to a blog post by Coinbase security engineer, Mark Nesbitt, and Satoshi Nakamoto’s whitepaper on Bitcoin.

“We observed repeated deep reorganisations of the Ethereum Classic blockchain, most of which contained double spends,” wrote Nesbitt. “The total value of the double spends that we have observed thus far is 88,500 ETC (~$460,000).”

These “chain reorganizations,” or “reorgs” for short, are essentially when a single miner has more resources than the entirety of the rest of the crypto mining network and this miner then arbitrarily picks a previous block from which to extend an alternative block history, outpaces the block history produced by the rest of the network and defines an entirely new canonical transaction history.

The double spends have since increased, totalling 219,500 ETC (~$1.1M) after detecting an additional 12 reorganisations. Coinbase has since paused movements of affected ETC funds to prevent any double spends from affecting its users.

By Daniëlle Kruger
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