Ethereum Classic (ETC) has somehow always been foreshadowed by its parent currency, Ethereum, out of which Ethereum Classic originated in form of a fork after the controversial failure of DAO. Ethereum Classic, currently ranked as the 17th-best currency in the market came into the spotlight as of the recent turn of events when Husam Abboud, a Brazilian researcher based in Sao Paolo with a position at FECAP University, has taken Ethereum Classic as an example for the research he had conducted regarding 51% Attack and blockchain platform categorize as vulnerable to this kind of hack attacks. Let’s see what the research showed.
Ethereum Classic and 51% Attack Case Scenario
Of course, Ethereum Classic wasn’t actually attacked while the system wasn’t compromised, however, due to statistics and precise calculations as well as thorough testing; Husam Abboud was able to present what would happen in case Ethereum Classic (ETC) was hit by 51% Attack.
51% Attack is a hacker attack and represents an illegal activity where the attacker directly jeopardizes the blockchain of the attacked systems.
In such attack, the hackers would be able to suspend all transactions and make delays while they would also be able to reverse these transactions, that way creating double coins while using the same coins twice. That could easily become the case if the attackers would decide to reverse the transactions before the initial completion of the process, which means that the attackers would be in control of the entire blockchain system, which is more than scary.
The reason why this attack is called 51% Attack lies in the fact that 50% of the computing power provided to the network is harvested from the computing power of the miners. Miners of a certain coin are the spinning wheel of the system which allows the network to get the transactions processed by having the miners verifying transactions while getting rewards in form of coins – it’s a widely known thing.
However, when the attackers brake through that 50% of the computing network and penetrate into the 51% of the system, they become in charge of the blockchain.
The Brazilian researcher from the FECAP University in Sao Paolo decided to go for Ethereum Classic specifically because ETC network uses Proof-of-Work protocol, and the main point of the test was to show that the platforms with PoW protocol make up for more vulnerable platforms than their peers running on different protocols, some of which are combinations of PoW and other protocols.
Moreover, Abboud was able to calculate the loss Ethereum Classic would go through in case it would become a victim of 51% Attack.
The result showed that the cost of the attack would be “only” around 55 million dollars, while the cost of the attack could go up to 80 million dollars. However, the profit that would be collected by the attackers in this case scenario would be around 1 billion dollars, making up for a pretty flattering profit.
Abboud added in his statement regarding his research that the hashing power for this attack would require immense resources that would be expansive, and that the attackers might be better off with mining the coins instead of hacking networks.
To raise the awareness of this problem, he also added that the attackers could easily reduce the costs and increase their profits with different tools that would allow them to draw hash power from other sources.
Abboud concluded the statement with reminding the public that the cause of this research was to raise the awareness of such attacks as well as to promote the upgrade of protocols to Proof-of-Stake, in oppose to the vulnerable Proof-of-Work that networks like Ethereum Classic use.
Ethereum Classic (ETC) and the Market
On May 26th, the majority of currencies can take a short break from trading in the red as the market is once again showing a bullish return, although the currencies are progressing slowly at this point. After the latest change in the market, ETC has also gone in the green zone while trading up against the dollar.
That is how ETC rose up by 3.95% against the dollar while trading in the green in the course of the last 24 hours.
In addition to trading in the green against the dollar, Ethereum Classic is going up against BTC as well, going up by 2.66%. Following the latest change in the market, Ethereum Classic (ETC) can now be traded at the price of 15.60$ per one unit, which is still far from its record price of around 45$ per one ETC as set back in January.
This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.